The Day at a Glance | September 28 2023

*The unemployment rate in Mexico surprised with its August reading as it logged a decline that underscores tight conditions in the local labor market.

*In China, current account figures for the 2Q23 were released; they point to a surplus worth $64.7 billion, lower than the $73.8 billion recorded a year ago.

*Despite surpassing market expectations, the economic sentiment indicator in the Eurozone fell to its lowest level since November 2020, with a 93.3 point reading, primarily reflecting the ongoing impact of inflation and the block´s aggressive monetary policy.

*New claims unemployment claims in the United States logged a slight increase (to 204,000) in the week ending September 23rd. However, the four-week average continued to decline as it reached 211,000.

*This afternoon, the Central Bank of Mexico will announce its monetary policy decision; the interest rate is expected to remain at 11.25%. 

Economic environment

The unemployment rate in Mexico – as a proportion of the Economically Active Population (EAP) – dropped to 3.0% in August. This reading compares to 3.5% from a year ago and the market’s expected 3.2%. As for the EAP, it reached 60,983,655 people, which entails an annual increase of 1,260,903 individuals and a 60.5% y/y participation rate (+0.5pp). Considering this data, the number of employed individuals reached 59,181,377, an increase of just over 1.5 million workers compared to the same period of 2022, while the unemployed population decreased by 307,000 individuals to 1,802,276. These figures reflect tight conditions that persist in the Mexican labor market and provide reasons for Banxico to keep its reference rate unchanged.