Mexico’s jobless rate jumps to 7-year
high
Sept. 23 -- Mexico’s jobless rate for August
soared to its highest level in more than seven years as companies such
as ceramic tile maker Grupo Lamosa SA cut payrolls.
President Vicente Fox tried to brighten the news, saying the nation
had recovered the jobs lost during the recession that began in 2001.
Fox said the renewed economic growth this year should generate around
a total of 400,000 new jobs by year end. Official statistics say 320,000
jobs have been created since the beginning of the year.
“We have recovered the jobs lost during three years,” Fox
told a convention of engineers from throughout Latin America. “However,
this is no big accomplishment. We lost a lot of jobs and we have regained
many jobs, but where are the new jobs for the young entering the workforce?”
More than one million Mexicans reach working age every year. To generate
enough formal jobs for such numbers the economy would need to expand
more than seven percent per year. This year the economy is expected
to grow 4.2 percent.
The August unemployment rate rose to 4.35 percent from 3.75 percent
in July, Mexico’s census bureau said on its Web site. The rate
was also higher than the 3.72 percent median forecast in a Bloomberg
survey of 15 economists.
“Undoubtedly there is an increase in export manufacturing industry
but employment is not following,” Edgar Amador, an economist with
Stone & McCarthy Research Associates in Mexico City, said in a telephone
interview. “Companies are investing in raising productivity and
don’t hire as many people as they did.”
Monterrey-based Lamosa will fire 100 workers after it invests S35 million
to modernize equipment and boost production at its plant in Tlaxcala
state, said Federico Toussaint, Lamosa’s chairman and chief executive.
“At the end of the day, we’ll have a reduction in personnel
and more modern equipment,” Toussaint said. “This investment
will give us better productivity, better efficiency and more capacity
to bring new designs to the market.”
Mexico retail sales in July rose 4.8 percent, the fastest pace since
November 2003, raising expectations among economists that a rebound
in consumer demand would help foster job growth.
August’s jobless rate the highest since January 1997 shows that
the domestic market isn’t growing as fast as analysts expected,
Amador said. “If there is no rise of employment, a recovery will
be short-lived,” he said.
Source: El Universal
