Mexico economy: Labour market conditions looking up despite weak

Event

In the fourth quarter of 2012, 48.2m people were employed, an increase of 368,000 over the same period in 2011.

Analysis

In the same period, the labour force accounted for 50.7m people. This marked a decline of 686,000 over the previous quarter, mostly reflecting a drop in total employment, which edged down 1.1% to 48.2m. At the same time, the total number of unemployed workers declined by 5.9% while the number of people out of the labour force increased by almost 1m, thereby helping keep the labour force participation rate almost unchanged at 58.9%.

On a year-on-year basis, total employment increased by 0.8%, while total unemployment was up by 2.1% (representing 4.9% of the workforce). The biggest improvement in the employment figures occurred among those workers employed for more than 48 hours a week, followed by those employed for between 35 and 48 hours per week. In contrast, the number of workers employed for less than 35 hours and with a temporary leave of absence declined. These trends reflect an improvement in labour market conditions as longer working hours tend to be positively correlated with jobs in the formal economy or permanent contracts. In addition, it also tends to imply higher take-home income. In fact, over the previous four quarters, the number of people working in micro-businesses declined by 757,000, while those employed by mid- and large-firms increased by nearly half a million. Both the share of workers earning less than one minimum wage as well as those without income edged down modestly in year-on-year terms as well.

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