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Mexican April Jobless Rate Points to Weak Recovery
 Jason Lange & Leslie Josephs - Reuters
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May 26, 2010
Mexico City - Mexico's unemployment rate rose unexpectedly in April, the latest sign of weakness in the country's recovery from recession and another factor that could give the central bank more room to leave interest rates low.
The jobless rate was 5.42 percent in April, the national statistics institute said on Tuesday, up from 4.81 percent in March and much higher than the 4.70 percent economists had predicted in a Reuters poll.
Latin America's second-largest economy is limping back from a deep recession exacerbated by the collapse in U.S. demand for Mexican products in late 2008 as the global financial crisis hit. The central bank has said the economy is still too weak to fuel consumer price increases.
"It tough out there. It's really tough," said unemployed factory worker Alejandro Najara at an industrial park just north of the capital.
Najara said he was laid off from a cosmetics factory in the western city of Guadalajara in January and has spent two months searching for work in factories around Mexico City.
While factory output has risen in recent months, especially for exports like cars, the Mexican economy contracted in the first quarter as consumers continued to lay low.
Many investors think the central bank will raise rates early next year to contain inflation as the economy recovers but worries are growing that Europe's troubles could hit the global economy. That could lead central banks around Latin America to rethink rate hikes.
Mexico left its target overnight interbank rate at a 6-1/2 year low of 4.5 percent last Friday.
In a separate report, the central bank said Mexico posted a $765 million current account deficit in the first quarter, equivalent to 0.3 percentage points of gross domestic product.
Mexico ran a current account deficit of $690 million in the fourth quarter of 2009 and a deficit of $1.3 billion in the first quarter of 2009.
(Editing by John O'Callaghan)
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