MexECON Blog

June Unemployment Falls to 4.8 Percent

Mexico's June unemployment rate fell to a seasonally-adjusted 4.8%, after unrevised readings of 5.0% in May and 4.9% in April.  The jobless rate in June was the lowest in four months, though it was only slightly below its six-month moving average of 4.9%.  The report was released today by INEGI, the official statistics agency.

Comment:  The June drop in Mexican unemployment is encouraging, but it is not enough to signal a dramatic improvement in the labor market or a rapid acceleration in economic growth.  The downward trend in joblessness continues to be excruciatingly slow.  Unemployment is still well above its level before the 2008-2009 recession.  It is true that Mexican exports have recently strengthened on the back of rebounding U.S. demand, and there are some signs that homebuilding and public works construction are at least stabilizing after a long period of declines.  Those factors probably explain much of the fall in joblessness in June.  Nevertheless, it is important to remember that the Mexican economy is still in the process of recovering from its weak spot over the last couple of quarters.  The labor market still has considerable slack, and the consumer is still adjusting to the sales tax hikes that were implemented at the beginning of the year.  That will likely limit how much the Mexican economy can accelerate in the near term.

Patrick Fearon, CFA
Vice President, Fund Management

                                           Mexico's Unemployment Rate
                                            Seasonally Adjusted, Percent
                                                      Source:  INEGI
Unemployment 1406

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