MexECON Blog

January Unemployment Falls to 5.2 Percent

Mexico's January unemployment rate fell to a seasonally-adjusted 5.2%, down from revised readings of 5.5% in both December and November.  According to the report, from the official statistics agency INEGI, joblessness in Mexico is now back to its lowest level since last August.  Nevertheless, the unemployment rate is still relatively high.  Since the beginning of 2001, Mexico's unemployment rate has averaged 3.9%, and joblessness was even lower than that during the country's last economic boom from 2005 to 2008.

Comment:  Mexican unemployment appears to be retreating from its worrying rebound last autumn, though a couple more months of declines would be necessary to confirm that.  In any case, the improvement in the job market is consistent with Mexico's recent reacceleration in exports and industrial activity and a rise in consumer confidence in January.  As suggested in this blog last month, new tax cuts in the United States and an improving U.S. job market may have prompted Mexican producers to expect stronger exports and a need to hire more workers.  Falling unemployment is important for Mexico because it helps consolidate the country's budding recovery in consumer demand.  In turn, that should make Mexico's overall economic rebound more resilient.

Patrick Fearon, CFA
Vice President, Fund Management

                             Mexico's Unemployment Rate
                              Seasonally Adjusted, Percent
                                          Source:  INEGI
Unemployment 1101

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