MexECON Blog

November Unemployment Falls to 4.6 Percent

Mexico's November unemployment rate fell to a seasonally-adjusted 4.6%.  That marked a surprisingly strong improvement from the 4.9% readings in each of the two previous months, and it was the lowest rate in five years.  The report was released today by INEGI, the official statistics agency.

Comment:  Mexico's unemployment rate had fallen only gradually from mid-2009 to 2012, and it posted a worrying rebound in late 2012.  Joblessness began to fall slowly again in early 2013, but the drop in November was unexpectedly strong, suggesting the labor market may finally be strengthening more meaningfully.  If true, it could potentially encourage stronger consumer spending and give the Mexican economy a second leg to stand on besides the current reacceleration in exports.  Stronger growth in both exports and consumer demand would help overcome the continuing weakness in other domestic sectors, such as public works, housing construction, and tepid investment.  However, it will probably take a couple more months of good readings to know if unemployment is really dropping more significantly.  Only time will tell.

Patrick Fearon, CFA
Vice President, Fund Management

                                           Mexico's Unemployment Rate
                                             Seasonally Adjusted, Percent
                                                     Source:  INEGI
Unemployment 1311

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