MexECON Blog

March Unemployment Falls to 5.1 Percent

In March, the Mexican unemployment rate fell back to a seasonally-adjusted 5.1%, after readings of 5.2% in February and 4.8% in January.  Mexico's unemployment rate is well below its cycle peak of approximately 6.0% in mid-2009, but the declines have been gradual, and joblessness in March was only slightly below the 12-month average of 5.2%.  The report was released today by INEGI, the official statistics agency.

Comment:  After Mexico's February unemployment rate jumped to a five-month high, it is encouraging that joblessness did not keep rising.  The pullback in March suggests the recent stabilization in the global economic environment and continued good growth in Mexico are still supporting the labor market.  Of course, the fall in Mexico's unemployment rate has been glacially slow, much like the fall in joblessness in the United States.  That probably makes sense, given that the two economies are so closely linked, and both are impacted by many of the same dynamics.  The sovereign debt crisis in Europe, the weak U.S. housing market, and weak lending growth are still breeding uncertainty and holding back overall North American activity.  Nevertheless, the United States and Mexico are still getting significant impetus from certain key sectors, such as international trade, manufacturing, energy development, and consumer spending.  That should allow for a continued slow improvement in labor demand in both countries.

Patrick Fearon, CFA
Vice President, Fund Management

                                           Mexico's Unemployment Rate
                                           Seasonally Adjusted, Percent
                                                        Source:  INEGI
Unemployment 1203

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