MexECON Blog

August Unemployment Rises to 4.9 Percent

Mexico's August unemployment rate rose to a seasonally-adjusted 4.9%, up from 4.8% in July.  Despite the rise in August, however, joblessness in Mexico remained slightly below its average rate of 5.0% over the previous year.  The report was released today by INEGI, the official statistics agency.

Comment:  Similar to the situation in the United States, joblessness in Mexico has been falling only slowly since hitting its cycle peak of 6.0% back in September 2009.  The glacial rate of decline has been especially frustrating when compared with Mexico's extraordinarily strong economic growth over the last several years.  The elevated level of unemployment may in part reflect the new unattractiveness of crossing the border to look for work in the United States, now that the U.S. economy is in the doldrums and federal and state immigration policies have become more punitive.  Without good opportunities north of the border, more Mexican workers are apparently staying home, and many are ending up with no job.  Nevertheless, Mexico's labor market is indeed improving, and that has helped buoy domestic demand.  If unemployment continues to trend downward, albeit slowly, domestic demand will probably keep rising.

Patrick Fearon, CFA
Vice President, Fund Management

                                          Mexico's Unemployment Rate
                                            Seasonally Adjusted, Percent
                                                     Source:  INEGI
Unemployment 1208

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