MexECON Blog

November Unemployment Rises to 5.6 Percent

In a report on Wednesday, Mexico's November unemployment rate rose to a seasonally-adjusted 5.6%, up from a revised 5.4% in October and 5.3% in September.  According to the report, from the national statistics agency INEGI, the unemployment rate in Mexico has now risen for three straight months, and it is coming closer to its cycle peak of 6.0% in September 2009.  For comparison, joblessness in Mexico was consistently between 3.0% and 4.0% during the country's last economic boom from 2005 to 2008.

Comment:  Mexico's unemployment rate showed a similar rebound in the spring, but then it pulled back.  This rebound is beginning to look more worrisome.  With joblessness now up for a third month, and with the unemployment rate breaching its level in May, it is beginning to look like the Mexican labor market is in a more significant weakening phase.  That is especially disappointing because Mexican consumer spending has recently been on the upswing, providing hope that it will help compensate for an expected slowdown in Mexican exports in 2011.  It is unclear what exactly is driving the resurgence in unemployment, but if joblessness continues to rise, the rebound in Mexico's consumption spending could be short lived.  In that case, the country's current economic recovery could once again become overly dependent on exports.

Patrick Fearon, CFA
Vice President, Fund Management

                             Mexico's Unemployment Rate
                              Seasonally Adjusted, Percent
                                          Source:  INEGI
Unemployment 1011

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