Mexico's jobless rate dips but above pre-crisis

Mexico's jobless rate dipped in July but still showed signs of slack in the labour market giving room for the central bank to keep interest rates on hold. The seasonally adjusted unemployment rate shrank to 5.27 percent from June's revised 5.77 percent, the national statistics agency said on Thursday.
Economists in a Reuters poll had predicted the rate would shrink to 5.6 percent. However, Mexico's jobless rate remained notably higher than before the global financial crisis. "In terms of labour utilisation the economy still exhibits significant slack," Goldman Sachs economist Alberto Ramos wrote in a client note that said labour markets and wages were not putting pressure on inflation.
Swollen jobless ranks and general economic uncertainty are among reasons why analysts expect the inflation-wary central bank to keep rates on hold in their Friday statement on monetary policy. 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.
In the first half of 2009, Mexico's central bank aggressively cut interest rates in the hopes of stimulating the economy struck by the impact of the global recession. It has held its benchmark interest rate at 4.5 percent since July 2009. On Thursday, the statistics agency said the raw unemployment rate rose to 5.62 percent. Analysts had expected it to climb to 5.71 percent from the 5.42 percent reported in June. Financial markets focus more on the seasonally adjusted unemployment rate than the raw jobless data. Economists in a Reuters poll had predicted the rate would shrink only to 5.60 percent from the originally reported 5.74 percent.