MexECON Blog

July Unemployment Falls to 4.8 Percent

Mexico's July unemployment rate fell to a seasonally-adjusted 4.8%, down from a revised 4.9% in June and 5.0% in each of the two months before that.  The rate of joblessness in July matched the cycle low reached last October.  The report was released today by INEGI, the official statistics agency.

Comment:  Mexico's unemployment rate had appeared stuck at 5.0% for the last several months, so the decline back down to the lowest rate this cycle is a very positive sign.  The decline helps explain the surge in Mexican consumer confidence in July, and it is consistent with Mexico's rising exports and good momentum in domestic demand.  Nevertheless, it is important not to exaggerate the improvement.  Mexican unemployment is still relatively high, and it has been falling only very slowly since hitting its cycle peak of 6.0% in September 2009.  If the European debt crisis worsens again or U.S. economic growth slows, economic activity in Mexico could soften again quickly. 

Patrick Fearon, CFA
Vice President, Fund Management

                                           Mexico's Unemployment Rate
                                            Seasonally Adjusted, Percent
                                                     Source:  INEGI
Unemployment 1207

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