MexECON Blog

January Unemployment Jumps to 5.3 Percent

Mexico's January unemployment rate jumped to a seasonally-adjusted 5.3%, compared with just 5.0% in December and a revised 5.2% in November.  The rate in January was the highest since September 2011.  The report was released on Friday by INEGI, the official statistics agency.

Comment:  Mexico's economic cycle has entered into a new phase of more moderate growth, and indictors are much more mixed than they were in the recent past.  Data from the fourth quarter show rebounding exports, strong manufacturing activity, and rising consumer confidence, but sectors such as construction and mining have turned downward, and a report earlier this week showed a disturbing drop in wholesale and retail sales at the end of the year.  A slower, more mixed economy would be expected to produce a softer labor market.  In that sense, it may be no surprise that Mexico's unemployment rate has stopped falling.  However, the outright jump in joblessness recently is an attention getter.  It may take a couple more months of data to get a solid understanding of how Mexico's economy is changing and what the near-term prospects really are.

Patrick Fearon, CFA
Vice President, Fund Management

                                          Mexico's Unemployment Rate
                                           Seasonally Adjusted, Percent
                                                     Source:  INEGI
Unemployment 1301

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