INTERVIEW-UPDATE 2-Brazil unemployment down, work week to be cut

* Labor minister says Brazil jobless rate to keep falling

* Lupi sees July unemployment rate at 7.9 pct to 8 pct

* Lupi to push cut in work week to 40 hours from 44 (Recasts, adds details, critic, context)

BRASILIA, Aug 19 - Brazil's jobless rate fell in July and the government will push for a four-hour reduction in the work week despite opposition from business leaders, Labor Minister Carlos Lupi told Reuters on Wednesday.

The unemployment rate fell to between 7.9 percent and 8 percent in July from 8.1 percent in June as part of a broader economic recovery this year, Lupi said.

"It will continue falling," he said in an interview in the capital Brasilia.

Lupi is more optimistic than most economists, although he was among the first to correctly forecast a growth in payroll jobs early this year.

The jobless rate likely crept up to 8.3 percent last month, according to the median estimate of 24 economists surveyed by Reuters. Estimates ranged from 7.8 percent to 9 percent. Brazil's statistics agency IBGE will release the official jobless data on Thursday.

Employers in Brazil took on a net 138,402 payroll positions in July, the sixth straight month of gains, the government said on Tuesday.

Signs of a recovery from recession in Latin America's largest economy have been growing, with most economists expecting gross domestic product to have grown in the second quarter and to end the year with near zero growth.

Lupi expects the year-end jobless rate to fall to 7.6 to 7.7 percent.

He also said he would help push the bill reducing working hours to 40 from 44 hours through Congress, despite the economic crisis and opposition from business leaders who say it would hurt Brazil's competitiveness.

Salaries would remain unchanged under the bill, but overtime rates would rise to 75 percent from 50 percent over normal pay.

"I'm in favor. It's a necessary advance for a modern society," said Lupi, arguing that workers would be more productive if they clocked fewer hours on the job.

Lupi will defend the bill next week in a hearing of the lower house of Congress, where the bill has been approved by an ad-hoc committee. The government has an ample majority in the chamber but only a narrow majority in the Senate. Lupi said he was confident both houses would pass the measure.

"I want to see senators announce they will vote against workers," he said defiantly.

The National Industry Confederation, the country's largest industry group, warned last week against a reduction of the work week amid the global economic crisis, saying it would hurt businesses.

Opposition legislators joined the criticism.

"It's a mistake. It will hurt the Brazilian economy and increase the cost of formal labor," Luiz Paulo Vellozo Lucas, a deputy of the centrist opposition PSDB party, told Reuters.

Most of Brazil's work force is not registered with the labor ministry and belongs to the vast informal economy.

Labor unions have marched in the streets of Brasilia in favor of the work load reduction.