Mexican jobless rate likely to have remained unchanged in August

The Mexican jobless rate dropped further by 75 basis points in 2016, according to the seasonally adjusted series. The country’s labor market data has usually been volatile and it might be appropriate to concentrate more on the trends in the jobless rate rather than the data points in the last few months.

However, it is surprising that the jobless rate has continued to fall given the weakening economic growth, said Societe Generale in a research note. Given that the Mexican economy is expected to lose momentum slowly, the labor market is likely to ease and the jobless rate is expected to remain stable if not rise from the present levels in the next coming quarters, according to Societe Generale.

The seasonally adjusted jobless rate is expected to have remained unchanged at 3.8 percent in August even while the non-adjusted rate is likely to have increased slightly. A severe decline in manufacturing growth or trade activities might result in the deterioration in the labor market.