Brazil Unemployment Falls in September

Unemployment fell last month to 9 percent from 9.5 percent in August in Latin America's largest country and is down from 10 percent from September 2006, the Brazilian Census Bureau said.

The rate is almost certain to drop further in coming months as employers hire hordes of workers ahead of the busy Christmas retail sales season. Analysts also expect continued strong growth for other sectors of the economy through the rest of the year.

But heavy domestic consumer demand and uncertain international economic conditions could prompt increased inflation, the central bank said separately.

The bank's comments came in the minutes of its meeting last week that resulted in a decision to maintain Brazil's benchmark Selic interest at 11.25 percent. It was the first time since September of 2005 that the bank did not lower the rate, and the bank's monetary committee said the possibility of rising inflation was a key factor driving the decision.

Inflation is currently running at an annual pace of 4.2 percent, but Brazilians are snapping up cars, appliances, houses and other goods at a rapid pace. The bank said its decision marked a "pause in the process of monetary policy easing" to ensure that inflation is still under control amid slow and steady economic growth.

"Seeking to consolidate an environment of stability and predictability, the committee has opted for a strategy of seeking to avoid a volatile inflationary trajectory," the committee said.