Mexico's April unemployment rate fell back to a
seasonally-adjusted 4.9%, after surging to 5.2% in March.
Despite the pullback, however, the rate of joblessness was still
higher than the 4.8% registered in each month from December through
February. The report was released today by INEGI, the
official statistics agency.
Comment: As I suggested after
last month's report, the surge in the official unemployment rate
during March almost certainly came from problems with the seasonal
adjustment process. The shifting date of Easter can make that
adjustment particularly difficult. The decline in the rate in
April is welcome, but it really just suggests that the labor market
has not changed from its stall of the last few months.
Unemployment in Mexico has shown little substantive improvement
since mid-2013. Coupled with the impact of higher sales taxes
beginning on January 1, that helps explain why the Mexican consumer
is much less optimistic than last year at this time. It also
suggests that consumer demand will remain in the doldrums for the
time being. If Mexican exports and investment strengthen in
the coming months, hiring could pick up and consumer spending could
rebound. For the time being, however, it looks like Mexico's
near-term economic growth will remain relatively weak.
Patrick Fearon, CFA
Vice President, Fund Management
Mexico's Unemployment Rate
Seasonally Adjusted, Percent