MexECON Blog

December Unemployment Rises to 4.8 Percent

Mexico's December unemployment rate rose to a seasonally-adjusted 4.8%, after dipping to a five-year low of 4.6% in November.  The rate of joblessness is still much lower than its peak of 6.0% in the midst of the last recession, and it is down from 5.0% in December 2012.  However, the current unemployment rate is no better than its average over the last six months.  The report was released today by INEGI, the official statistics agency.

Comment:  The dip in Mexico's unemployment rate during November had generated hope that the labor market was starting a more meaningful improvement that could eventually spur stronger consumer demand.  The rebound in joblessness during December suggests that hope may be misplaced.  The unemployment rate may simply be in a holding pattern punctuated by momentary blips upward or downward, or it may be trending downward at a glacial pace, just as it has been over the last several years.  Only time will tell whether the labor market will start strengthening more rapidly, but I suspect that the ongoing problems in Mexican domestic demand - particularly in tight government spending and weak construction activity - will prevent a significant, sustained improvement for a while yet.

Patrick Fearon, CFA
Vice President, Fund Management

                                       Mexico's Unemployment Rate
                                        Seasonally Adjusted, Percent
                                                  Source:  INEGI
Unemployment 1312

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