Remittances to Mexico again break record on back of strong U.S. labor market

Elsa Maria Gonzales, whose husband Alberto Burgos works in the U.S. to send money for their family, walks near the Western Union in Jantetelco, state of Morelos, Mexico November 12, 2020. REUTERS/Carlos Jasso/File Photo

MEXICO CITY, Sept 1 (Reuters) - Remittances to Mexico reached a record high in July as Mexican families received $5.3 billion from abroad, an annual increase of 16.5%, data from the Mexican central bank showed on Thursday.

This marks the third consecutive month that remittances reached a record amount, following highs recorded in May ($5.142 billion) and June ($5.144 billion).

Mexicans abroad - mostly in the United States where the economy benefited from stimulus measures that were absent in Mexico - are sending more money to help their families back home as President Andres Manuel Lopez Obrador struggles to deliver on promises to energize growth.

Register now for FREE unlimited access to Reuters.com

Lopez Obrador has often boasted about the strong expansion in remittances sent to Mexico, as rising inflation that hit 8.15% annually in July, its highest level in nearly 22 years, chips away at people's purchasing power. read more

Remittances this year through July rose 16.4% to $32.8 billion, the central bank said.

Lopez Obrador has forecast remittances to reach $60 billion by year end.

BBVA Research attributed the record flow in part to "buoyant" employment levels in the United States despite fears of a recession.

The U.S. unemployment rate fell to 3.5% in July, as accelerating job growth lifted employment above pre-pandemic level. read more

"As long as the level of unemployment in the United States remains at such low levels, significant levels of remittances will continue to reach Mexico," BBVA Research said in a note.

Register now for FREE unlimited access to Reuters.com
Reporting by Raul Cortes Fernandez, Diego Ore and Brendan O'Boyle; Editing by Chizu Nomiyama and Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles.