MexECON Blog

April Unemployment Falls to 4.9 Percent

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
                                                        Source:  INEGI
Unemployment 1404

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