BRASILIA, Jan 29 (Reuters) - Confidence in Brazil’s services sector has fallen this month, a survey showed on Friday, due to a surging second wave of the COVID-19 pandemic and the abrupt end of government cash transfers to millions of poor and vulnerable families. Services account for around 70% of all economic activity in Brazil, and they have lagged other areas, such as manufacturing and industry, in recovering from the pandemic-fueled slump. A recovery in the sector will be crucial to sustaining wider economic growth. The Getulio Vargas Foundation’s (FGV) services sector confidence index fell 0.7 points to 85.5 points in January, the third decline in the last four months. The index remains well above last April’s record low 51.5, but on the other hand it is far below the pre-pandemic level of 94.4 in February last year. “In view of the worsening COVID numbers and end of the government’s emergency programs, consumers are becoming increasingly cautious, and consuming fewer services where lots of people tend to gather,” said FGV economist Rodolpho Tobler. “This scenario represents a persistent obstacle to confidence in the sector recovering,” he said. Figures on Thursday showed that Brazil managed to create 142,690 formal jobs last year, despite the recession and lockdowns. Services, however, was the only one of five sectors where employment shrank, shedding 132,584 jobs.