MexECON Blog

June Unemployment Unchanged at 5.0 Percent

Mexico's June unemployment rate was unchanged at a seasonally-adjusted 5.0%, marking the third straight month at that level.  Joblessness in Mexico remains modestly below its two-year average of 5.2%, but it is above its cycle low of 4.8% last October.  The report was released today by INEGI, the official statistics agency.

Comment:  After reaching its cycle peak of 6.0% in September 2009, unemployment in Mexico began falling at a gradual pace.  In late 2011, it flattened out, and joblessness now appears stuck at about 5.0%.  Mexico's strong economic growth rate should be pushing unemployment lower, but it looks like problems from abroad are weighing on activity.  The main obstacles are the European debt crisis and slowing U.S. economic growth.  Without a doubt, those threats have started to discourage Mexican firms from hiring.  In addition, slow growth and tough immigration enforcement in the United States have kept many Mexicans from trekking north of the border in search of work.  Those who cannot find work in Mexico are probably now augmenting the ranks of the unemployed south of the border.  Unless the global economic environment improves soon, joblessness in Mexico is likely to remain stuck at about its current level or even increase in the near term.

Patrick Fearon, CFA
Vice President, Fund Management

                          Mexico's Unemployment Rate
                            Seasonally Adjusted, Percent
                                      Source:  INEGI
Unemployment 1206

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