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