Bloomberg reported that Brazil's unemployment rate jumped the most in 7 years in January 2009 as companies trimmed payrolls to weather the first global recession since World War II.

The national statistic agency said that unemployment in Brazil's six largest metropolitan areas rose to 8.2% in January 2009 from 6.8% in December 2008. The rate was higher than the 7.8% median forecast of 24 economists surveyed by Bloomberg.

It may be noted that Brazilian companies are slashing output and staffing as the global financial crisis chokes demand and commodity prices plummet. Empresa Brasileira de Aeronautica SA said that it will cut its workforce by 20% and Cia Vale do Rio Doce fired 1,300 workers in December 2008.

Mr Marcelo Carvalho chief economist at Morgan Stanley said that "The worst is yet to come. We are still in the early stages of labor market deterioration." He added that unemployment in Brazil will probably surpass 10% by mid year and in 2008, the jobless rate averaged 8%.

(Sourced from www.bloomberg.net)