In a Thursday report by INEGI, the official statistics agency,
Mexico's May unemployment rate jumped to a seasonally-adjusted
5.5%. That was up from 5.2% in April and an upwardly revised
5.0% in March. With the jump in May, joblessness in Mexico is
now at its highest level since last November.
Comment: Mexican unemployment is
still lower than its cycle peak of 5.9% in summer 2009, but the
recent rebound is worrying. Unemployment in Mexico had been
falling gradually and unevenly, but the decline was enough to boost
consumer confidence and spur greater consumption spending.
The unexpected jump in joblessness now threatens to undermine
consumer activity, just when domestic spending might be needed to
help offset the impact of slowing exports. More likely than
not, the rise in joblessness can be traced to the global economic
soft spot, which has weighed on exports and led to three straight
months of declines in economic production. Since there is no
clear catalyst to end the soft spot and spur a reacceleration in
exports, the labor market could continue to deteriorate and
consumer activity could weaken in the months ahead.
Patrick Fearon, CFA
Vice President, Fund Management
Mexico's Unemployment Rate
Seasonally Adjusted, Percent