Strong indicators put deceleration in doubt
Valor Econômico
The disclosure of major economic indicators in the past days put into question the view of slowdown of the activity in early 2011. The strong creation of formal jobs in Q1, the positive performance in January in the retail and the Index of Economic Activity of the Central Bank (IBC-Br) point to an still strong economy, supported by the continuous growth of the labor market. The unemployment rate lies in the historical minimum averages and the income remains strong, keeping consumer confidence high, regardless of the increase in the interest rates and adoption of measures of credit constraint.
In such scenario, it becomes stronger among economists the bet on growth of the Gross Domestic Product (GDP) in the first quarter nearly 1% compared to the fourth quarter of last year, with seasonal adjustment - a variation stronger than 0.7% compared to the previous quarter, on the same basis for comparison. For the Economist Fábio Ramos, of Quest Investimentos, the stronger result in the first three months of the year may turn 4% into the floor for the projections for growth in 2011, interrupting the process of reduction of the estimates to the interval between 3.5% and 4%.
Ramos outlines the extremely strong behavior of the labor market. In January, he says, the unemployment rate stayed at 6.2% in seasonal adjustment of Quest, the lowest level of the series, the same of October and November 2010. Even if the trajectory does keep falling as occurred throughout last year, it is an extremely low level for Brazilian standards, which continues stimulating the economic activity and putting pressure on inflation, in the assessment of the Chief Economist of the MB Associados, Sérgio Vale. In that scenario, yield follows at a steady trajectory, as observes Economist Júlio Callegari, of J.P. Morgan. That is a factor that leads to foreseeing another good year for household consumption.
Regis Bonelli, researcher of the Brazilian Institute of Economics (Ibre) of the Getúlio Vargas Foundation (FGV), observes consumer confidence remains quite high, which helps explain the good moment in the retail sales in January. For Bonelli, the increase underway in the Selic rate (Basic Rate of Interest) seems to have little affected short-term consumption decisions. The credit restriction measures had an impact on the financing terms and interest rate, he says, remarking, however, that at the same time there was greater search for more expensive credit lines, such as overdraft-secured check and credit card.
A signal of strength of the economy was the creation of formal jobs in February, which reached 280.2 thousand jobs, especially for the service sector, says Ramos. The large volume of formal jobs indicates the businessmen continue with positive expectations about the economy, believes the Chief Economist at Santander, Maurício Molan. He said the measures to contain the demand have not led companies to stop hiring, at least not so far.