Mexican jobless rate likely to have remained nearly unchanged in September

The Mexican labor market continues to be in a better shape than the economy. The seasonally adjusted series indicates that the jobless rate in the country dropped further by 0.8 percentage points in 2016 in spite of a much slower-than-expected growth and persistent downward adjustment of the growth outlook.

Data for Mexico’s labor market has usually been volatile. But the fact that the jobless rate has continued to fall amidst weakening growth is unexpected. Given that the Mexican economy is expected to lose momentum slowly, the labor market is likely to ease and the jobless rate to stabilize in the coming few quarters, stated Societe Generale.

Mexico’s jobless rate is expected to have stayed almost unchanged in September. A severe drop in manufacturing growth of activities in trade, both of which depend on the U.S. economy, might result in an immediate deterioration in the labor market. But it is more likely that the labor market would decelerate at a gradual rate as appears to be the case with the economy, added Societe Generale.