MexECON Blog

March Unemployment Falls to 5.1 Percent

In a report on Wednesday, Mexico's March unemployment rate fell to a seasonally-adjusted 5.1%, compared with revised readings of 5.2% in February and January.  According to the report, from the official statistics agency INEGI, joblessness in Mexico has now fallen or stayed the same for four straight months, and the unemployment rate in March was the lowest since last August.

Comment:  Mexican unemployment is down significantly from its cycle peak of almost 6.0% in summer 2009, and even though it is coming down only gradually, the improvement has been enough to give Mexican consumers more confidence and spur increased consumption spending.  In fact, consumption spending was the top source of Mexican economic growth in the last two quarters of 2010, and recent reports on consumer confidence and retail sales suggest consumption is continuing to grow well in early 2011.  If Mexican exports and industrial production continue to grow well, the unemployment rate is likely to continue dropping toward the ten-year average of 3.9%, and consumer spending will likely keep contributing importantly to Mexican economic growth.

Patrick Fearon, CFA
Vice President, Fund Management

                             Mexico's Unemployment Rate
                              Seasonally Adjusted, Percent
                                          Source:  INEGI
Unemployment 1103

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