July 22, 2009 / 8:02 PM / 10 years ago

UPDATE 2-Mexico unemployment dips, but prospects still grim

* Mexico unemployment falls to 5.17 percent in June

* Jobless rate still near 13-year high

* Eventual recovery in Mexico hinges on United States (Adds quotes, background, byline)

By Pedro Nicolaci da Costa

MEXICO CITY, July 22 (Reuters) - Mexican unemployment posted a surprise decline in June but remained near a 13-year high as the country struggled with a crippling recession that has ravaged its key export sector.

The jobless rate fell to to 5.17 percent last month from 5.31 percent in May, the national statistics agency said on Wednesday. Analysts had foreseen a rise.

Mexico’s economy is expected to shrink more than 6 percent in 2009 in what could be the most severe contraction since the Great Depression of nearly 80 years ago.

May’s jobless rate was the highest since 1996, when Mexico was still grappling with the aftermath of a currency crisis that left the financial system in shambles.

The latest figures were a potentially encouraging sign of stabilization, although analysts were cautious not to read too much into a single month’s change.

“Conditions are really deteriorating in Mexico,” said Bertrand Delgado, an economist at RGE Monitor in New York. “Unemployment figures are likely to creep up.”

Indeed, the country’s export-oriented manufacturers have shed hundreds of thousands of jobs over the last year as U.S. demand for Mexican-made products like cars and televisions has fallen sharply.

The malaise has filtered into other areas too, punishing consumer confidence and denting retail sales.

Such anxiety was palpable among job seekers, who were becoming increasingly discouraged by the grim employment prospects.

“It’s very hard,” said Deborah Breton, a 29-year-old accounting assistant who has been without work for five months. “I’ve been going to three or four interviews a week but nothing has panned out.”

Her experience is not uncommon, according to Fernanda Taboada, who works at an employment agency in Mexico City. Many applicants are willing to settle for jobs well below their qualifications, she said.

“People are taking what they can get,” she said.

Mexico’s prospects for recovery rest on a potential rebound in U.S. consumer spending, which at the moment looks uncertain.

The U.S. savings rate rose to a 15-year high of 6.9 percent in May as once free-spending Americans have begun stashing away what they can. (Additional reporting by Jason Lange; Editing by James Dalgleish)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below