Mexico's February unemployment rate came in at a
seasonally-adjusted 4.7%, unchanged from the revised rate in
January. The rate of joblessness now sits slightly below its
six-month average of 4.8%, and it is modestly lower than the 4.9%
reading in February 2013. The report was released today by
INEGI, the official statistics agency.
Comment: Mexican unemployment
remains far below its peak of 6.0% during the last recession.
However, the improvement has been frustratingly slow, and
policymakers at Banco de México noted in their policy statement
last week that there is still significant slack in the labor
market. The main culprits are now soft exports and a
virtually freeze in the construction industry. Because of the
lack of appreciable improvement in the labor market and a hike in
sales taxes at the beginning of 2014, Mexican consumer confidence
has fallen sharply in recent months, and retail demand has
cratered. Mexican economic growth is therefore likely to
remain tepid in the near term.
Patrick Fearon, CFA
Vice President, Fund Management
Mexico's Unemployment Rate