MexECON Blog

October Unemployment Falls to 4.8 Percent

Mexico's October unemployment rate dropped sharply to a seasonally-adjusted 4.8%, down from a revised 5.2% in September and 5.3% in August.  Joblessness in Mexico is now at its lowest rate in almost three years.  The report today was released by INEGI, the official statistics agency.

Comment:  To date, Mexico's job market has mirrored the trends in the United States and most other big developed countries.  Unemployment has fallen from the extreme levels reached in the midst of the global recession, but the improvements have come at a glacial pace.  In fact, when Mexico's September unemployment report was released last month, this blog opined that further substantial declines in joblessness were unlikely.  It is still too early to know for sure, but today's surprisingly good report may be a sign that Mexico's labor market has found some unexpected traction.  It is notable that the drop in Mexican unemployment came just as weekly jobless claims in the United States fell below the key 400,000 level for several straight weeks, and as other recent indicators show U.S. economic growth has actually accelerated modestly for the last two quarters.  This could indicate that the North American economy as a whole has at least partially "decoupled" from the travails in Europe and is now on a slow but relatively resilient upswing.  If the financial stresses and slowing economic growth in Europe and Asia get bad enough, they would still present some serious economic risks for North America in general and Mexico in particular.  Nevertheless, if those risks are realized, the momentum in the North American economy may help cushion the blow.

Patrick Fearon, CFA
Vice President, Fund Management

            Mexico's Unemployment Rate
             Seasonally Adjusted, Percent
                         Source:  INEGI
Unemployment 1110

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