The unemployment rate in Mexico remained flat at 4.5% sa in February as the participation rate increased slightly, to 60.2%, from 59.7% in January. In annual terms, unemployment decreased to 4.3%, from 4.7% in February 2014.The report suggests that there has been a consistent modest increase of new entrants to the labor market, driving the unemployment rate up. Barclays notes as follows – “There is still a long way for unemployment to reach close to 4.0%, which is our year-end forecast. This might become difficult if the economy grows more slowly than expected in the coming months. In fact, in February, manufacturing exports fell 0.3% m/m sa, a reflection of still-weak external demand.We confirm the belief that the labor market remains unpressured, supporting subdued inflation prints in the coming months and allowing Banxico to wait for the Fed to start a hiking cycle.”
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