INEGI: Unemployment Grows in Seven Entities

A recent survey by the National Institute of Statistics and Geography (INEGI) revealed that unemployment rates ticked upwards in July across seven states, while an additional 17 entities reported fluctuations between 3-5 percent. Unsurprisingly, this data corresponds with the emergence of a third COVID-19 wave that was first acknowledged by Deputy Health Minister Hugo Lopez-Gatell on July 6.

Mexico City and Queretaro had the highest rates of unemployment last month; where of their economically active population, respectively, 7.48 percent and 6.53 percent were absent from the local workforce. Both of these economic centers are characterized by significant internal mobility, which has placed additional strain on the labor market. These states were followed up by the State of Mexico with 6.50 percent unemployment, Tabasco with 5.86 percent, Guanajuato with 5.53 percent and Tlaxcala with 5.34 percent.

Meanwhile, an additional 17 states exhibited employment instability, recording variations below 5 percent but above three percent: Sonora 4.68 percent, Aguascalientes 4.59, Durango 4.38, Tamaulipas 4.34, San Luis Potosi 4.30, Coahuila 4.28, Quintana Roo 4.14, Jalisco 4.08, Puebla 4.06, Hidalgo 4.05, Baja California Sur 3.86, Nuevo Leon 3.85, Zacatecas 3.63, Chiapas 3.62, Nayarit 3.59, Campeche 3.32, and Yucatan with 3 percent.

In comparison to July of last year, however, only seven states registered unemployment growth. Tourism dependent Yucatan saw the biggest increase of all states with 1.44 percentage points, followed by border state Tamaulipas with 0.84 points. The State of Mexico followed suit with 0.53 points, Chiapas and Mexico City with 0.32 points, Durango with 0.10 and Nayarit with 0.03.

In contrast, the states with the lowest unemployment rates where: Guerrero with 1.66 percent, Oaxaca 1.87, Colima 2.06, Michoacan 2.33, Morelos 2.41, Baja California 2.59, Chihuahua 2.73, Sinaloa 2.84, and Veracruz with 2.95 percent.

Nonetheless, according to a publication in the FRBSF Economic Letter, a ‘normal’ unemployment rate usually stands at around 5 percent and given new market conditions this figure may have risen as high as 6.7 percent. In light of this perspective, the numbers reported by INEGI may be considered normal in the exceptional circumstances brought on by the pandemic.