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