MexECON Blog

June Unemployment Falls to 5.5 Percent

In a preliminary estimate released Friday, Mexico's June unemployment rate fell to a seasonally-adjusted 5.5%.  The May unemployment rate was revised lower to 5.6%.  According to the report, from the national statistics agency INEGI, joblessness in Mexico is now back down to its level in April, though it is still relatively high.  During Mexico's last economic boom in 2005 through 2008, the unemployment rate was consistently between 3.0% and 4.0%.

Comment:  The downwardly revised unemployment figure for May and the decline in June are encouraging, but the bulk of the data still suggests that Mexico's economic rebound is hitting speed bumps.  Earlier this month, a separate report showed that Mexico's index of leading economic indicators fell in April for the first time in more than one year.  Even more unsettling, another report on Friday showed that Mexican exports declined in June for a second straight month.  That is important because the country's current economic rebound stems in large part from increased exports to the United States, which in turn have led to increased economic activity and stronger hiring.  If demand from north of the border now falters, the Mexican economic rebound could slow and unemployment could begin to rise again.  Mexico's rebound is more likely to continue than to falter, but the rate of increase is likely to slow and become more volatile than in the recent past.

Patrick Fearon, CFA
Vice President, Fund Management

                                         Mexican Unemployment Rate
                                         Seasonally Adjusted, Percent
                                                      Source:  INEGI
Unemployment 1006

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