UPDATE 2-Brazil economy adds jobs in July but rate slows

* Brazil’s economy added 181,796 payroll jobs in July

* Increase is seventh straight month of gains

* Fewer jobs created than in June
(Recasts; adds quotes, details, byline)

By Ana Nicolaci da Costa

BRASILIA, Aug 19 (BestGrowthStock) – Brazil’s economy added payroll
jobs for a seventh straight month in July but the pace of job
creation slowed, the Labor Ministry said on Thursday.

Latin America’s largest economy added 181,796 payroll jobs,
the ministry said, down from 212,952 in June. The number of
jobs created has fallen for three months, ministry data
showed.

The numbers reflect the slowdown in the economy in the
second quarter after massive 9 percent year-on-year growth in
the first quarter of the year.

The data could reinforce expectations Brazil’s central bank
will keep interest rates on hold at 10.75 percent at its next
monetary policy meeting at a time when investors are struggling
with mixed signals including from the central bank.

But Labor Minister Carlos Lupi shared other official views
that there would be a comeback in the second half of the year,
predicting record job creation for August, September, October
and November.

“The number shows a leveling off of the market which had
very strong growth in the first months of the year,” Lupi
said.

“This year the second half of the year will be even better
than the second half of 2009.”

The expectation of a more robust second half is in line
with the views of other government officials.

Central Bank chief Henrique Meirelles said on Wednesday he
expected a recovery in the third quarter while Finance Minister
Guido Mantega has said he expects growth to go back to
sustainable levels in the latter part of the year.

Despite this, inflation expectations remain relatively
contained and the central bank is largely expected to keep
interest rates steady at 10.75 percent on Sept. 1.

The economy added 1,655,116 jobs in the year through July
— the highest number for the period since the government began
tracking the data in its current format, Lupi added.

Services and industry were the best performing sectors,
creating 788,721 and 573,666 payroll jobs respectively.

President Luiz Inacio Lula da Silva has made it a priority
to increase payroll jobs. Most of Brazil’s work force is not
registered with the Labor Ministry and belongs to a vast
informal economy.
(Editing by James Dalgleish)

UPDATE 2-Brazil economy adds jobs in July but rate slows