Mexico June jobless rate rises to near 2-year high

MEXICO CITY: Mexico's unemployment rate rose to its highest in nearly two years in June, adding to evidence the country's economy is losing some steam and supporting bets that Mexico is far from raising interest rates.

Mexico's seasonally adjusted unemployment rate rose to 5.74 percent in June from a revised 5.58 percent in May, the national statistics agency said on Thursday. June's rate is the highest since September 2009 and is above the 5.47 percent projected by a Reuters poll.

"The economy still exhibits significant slack, and therefore the current real business cycle dynamics do not pose an immediate risk of demand-pull pressures on inflation," Goldman Sachs economist Alberto Ramos wrote in a note to clients about the rise in Mexico's jobless rate.

In the years before the global downturn, Mexico's unemployment rate rarely climbed above 4 percent, but it has not fallen below 4.5 percent since October 2008, in seasonally adjusted terms.

June's headline unadjusted unemployment rate was 5.42 percent in June compared to 5.10 percent analysts had expected.

The central bank said earlier this month that slower growth is easing inflation pressure, and the market does not see Mexico raising interest rates until around April 2012.

Copyright Reuters, 2011