MexECON Blog

December Unemployment Falls to 5.0 Percent

Mexico's December unemployment rate fell to a seasonally-adjusted 5.0%, compared with 5.1% in November.  Despite the decline in December, however, the average rate in the fourth quarter was the highest since the first three months of 2012.  The report was released on Monday by INEGI, the official statistics agency.

Comment:  Mexico's labor market is clearly a bit weaker than it was during mid-2012, as would be expected in an environment of moderating exports, cooler industrial activity, and softer fixed investment.  Nevertheless, other indicators are pointing upward.  Purchasing managers' indexes for the manufacturing sector are at record highs, and consumer confidence is continuing to improve.  Demand in the United States, which is Mexico's key export market, is apparently still growing, albeit slowly.  Against this backdrop, the recent rebound in unemployment is probably just underlining the fact that Mexico's economic growth is likely to moderate in the coming months from the extraordinarily strong rates of the last three years to something more like its long-term average.

Patrick Fearon, CFA
Vice President, Fund Management

                                           Mexico's Unemployment Rate
                                             Seasonally Adjusted, Percent
                                                     Source:  INEGI
Unemployment 1212

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