MexECON Blog

March Unemployment Falls to Lowest Since 2008

Mexico's March unemployment rate fell to a seasonally-adjusted 4.2%, compared with revised readings of 4.4% in each of the previous three months.  Joblessness in Mexico has been falling rapidly over the last several quarters, and the figure for March was the lowest since October 2008.

The report was released on Monday by INEGI, the official statistics agency.

Comment:  With the sharp drop in unemployment during March, it is clear that the Mexican labor market continues to improve rapidly.  Healthy exports, strong manufacturing activity, increasing investment, and an ongoing rebound in the country's construction sector have finally led to a significant boost in hiring.  There is still little evidence that wage rates are accelerating, but lower unemployment should encourage increased consumer spending and support decent economic growth in the coming months.  In turn, that could give Banco de México more leeway to raise interest rates if rising U.S. rates spark an outflow of capital.

Patrick Fearon, CFA
Portfolio Manager

Unemployment 1503

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