Mexico's unemployment rate likely moderated slightly in May

After peaking in July 2014, the unemployment rate declined to 3.76% in December, as labour force growth slowed in line with employment growth, and it then fluctuated between 4.51% in January and 3.86% in March. 

The more stable seasonally-adjusted rate has hovered between 4.24% and 4.41% over the past few months. 

"With growth prospects for Q2 improving, these two rates are expected to moderate to 4.21% and 4.25%, respectively", says Societe Generale. 

Both these indicators have declined between 0.5% and 1.0% over past 12 months and are nearly at levels last seen in 2008.

The economy appears set to grow near trend in 2015 and above trend in 2016. This will help tighten the labour market further and should keep the downside risk to inflation in check even though the economy's growth potential could continue to rise over the next few years.