Brazil’s retail sales fell more than expected by analysts in July, marking the worst performance for that month in 15 years, as rising unemployment takes its toll on Latin America’s largest economy.
Sales fell 0.3%, after a revised 0.3% increase in June, the national statistics agency said. The result was slightly worse than the median forecast from economists, for a 0.2% decline. Sales fell 5.3% versus the same month in 2015, the worst July since the series began in 2001.
Consumer confidence in Brazil has been steadily on the rise since Michel Temer assumed the presidency in mid-May. Unemployment has also been rising, however, and currently stands at its highest level on record. Temer’s efforts to pull Latin America’s largest economy from its worst-ever two-year recession and recoup lost jobs hinge on his administration’s ability to push fiscal reform measures through Congress.
'The increase in confidence brought by the new government could help with a recovery of consumption, in the future,' according to a note to clients from Rosenberg Associados. 'It’s still early to expect a reversal, but retail should find its lowest level in the fourth quarter of the year.'
Sales of food, beverages and tobacco products at hypermarkets and supermarkets fell 0.3% in July, after a revised 0.3% increase a month earlier. Furniture and appliance sales fell 1%.
Broad retail sales, which include cars, car parts and construction materials, dropped 0.5% from June and 10.2% versus July last year, according to the statistics institute.
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