MexECON Blog

March Unemployment Jumps to 5.3 Percent

Mexico's March unemployment rate jumped to a seasonally-adjusted 5.3%, after revised readings of 4.8% in each of the prior three months.  The rate of joblessness in March was the highest since November 2012, and it was far above its six-month average of 4.9%.  The report was released today by INEGI, the official statistics agency.

Comment:  Shifting holidays, such as Easter, can play havoc with the seasonal adjustment process.  That could explain some of the jump in Mexican unemployment during March.  The reported rate of joblessness for April could easily fall back toward its recent range when the numbers come out next month.  Nevertheless, the limited improvement in the labor market since mid-2013 and the imposition of new sales taxes at the beginning of 2014 have undermined consumer confidence and kept a lid on retail demand.  If unemployment does not show a substantial improvement next month, Mexican consumption could remain weak.  In fact, the ongoing softness in Mexican exports and a deep freeze in construction activity would suggest the labor market will almost certainly remain soft.  That would be another reason to expect that Mexico's near-term economic growth will be weaker than many observers are currently expecting.

Patrick Fearon, CFA
Vice President, Fund Management

                                            Mexico's Unemployment Rate
                                             Seasonally Adjusted, Percent
                                                        Source:  INEGI
Unemployment 1403

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