MexECON Blog

February Unemployment Rises to 5.3 Percent

In a new report from INEGI, the official statistics agency, Mexico's February unemployment rate rose to a seasonally-adjusted 5.3%, compared with an unrevised 5.2% in January.  Despite the small rise, however, unemployment remained lower than the average rate of 5.4% during the last three months of 2010.

Comment:  Mexican unemployment has fallen back from its peak of 6.0% in the midst of the recession, and it is down from its worrying rebound late last year.  Nevertheless, a quick look at the chart shows joblessness remains stubbornly elevated and does not appear to be on a clear downward path as yet.  The important thing for now is simply that the labor market has stabilized.  Mexican exports are booming, industrial production is up strongly, and hiring has improved.  All this has given Mexican consumers more confidence, and they have been boosting their spending.  Indeed, a report earlier this week showed consumption spending was the top source of Mexican economic growth for the last two quarters.  If hiring accelerates further and unemployment drops closer to the ten-year average of 3.9%, consumer spending is likely to keep powering the Mexican economy forward.

Patrick Fearon, CFA
Vice President, Fund Management

                              Mexico's Unemployment Rate
                               Seasonally Adjusted, Percent
                                            Source:  INEGI
Unemployment 1102

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