MexECON Blog

May Unemployment Jumps to 5.5 Percent

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
                                               Source:  INEGI
Unemployment 1105

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