MexECON Blog

September Unemployment Falls to 5.3 Percent

Mexico's September unemployment rate fell to a seasonally-adjusted 5.3%, after rising to 5.4% in August.  In spite of the decline last month, however, joblessness in Mexico is still somewhat higher than its average in the first few months of 2011.  The report today was released by INEGI, the official statistics agency.

Comment:  After a summer of unremittingly bad reports, recent economic releases in the United States and other key developed countries have been somewhat more reassuring.  For example, U.S. retail sales posted a surprisingly good increase in September, and initial jobless claims have been more or less stable throughout October.  Nevertheless, economic growth has clearly weakened throughout the developed countries.  Even worse, there are no clear prospects for accelerating growth in the near future, and risks are weighted to the downside.  In this environment, the outlook for Mexican exports has darkened.  Domestic demand in Mexico still has some momentum, but that could change if there is a retreat in trade and industrial output.  In sum, there seems to be little room for further substantial declines in the Mexican unemployment rate.  Joblessness in Mexico is more likely to be stable or rise in the coming months, rather than decline further.

Patrick Fearon, CFA
Vice President, Fund Management

                                          Mexico's Unemployment Rate
                                           Seasonally Adjusted, Percent
                                                      Source:  INEGI
Unemployment 1109

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