Based on the National Occupation and Employment Survey (ENOE), in general terms October was a month with a positive balance for the labor market. The incorporation of 1.2 million people into the employed population was the reflection of a better economic environment, which allowed the reactivation of various sectors. However, the job recovery It could still be affected in the coming months due to various factors, such as a fourth wave of Covid-19.
“The shock of the third wave, at least in terms of total employment, has already been erased,” said Juan Carlos Alderete, director of Banorte’s Economic Analysis. In that sense, the rebound observed in October and with some indicators at their best level throughout the pandemic, a better economic dynamism could be expected for the rest of 2021. But the new Covid-19 Omicron variant and a new wave infections could slow down this recovery.
The Omicron variant It was detected in South Africa and has been classified by the World Health Organization (WHO) as “worrying” due to its ten mutations and its high contagion capacity. Economic specialists consider that the impact of this new strain in a fourth wave of transmission could affect the labor market in Mexico again.
“The severity of the new variant is still unknown, but governments are anticipating imposing restrictions on international travel from countries that have identified the presence of the Omicron variant. If it turns out to be a variant with a higher degree of transmissibility and mortality, the labor situation in Mexico could deteriorate considerably ”, stated Gabriela Siller, director of Economic and Financial Analysis at Banco Base.
This negative impact on the recovery due to the Ómicron variant and a new wave of infections would be linked to the restrictions on economic activities that would be adopted to stop the contagion. Which could particularly affect sectors such as services, which was crucial for the growth of the occupation in October.
For example in Germany the presence of the new strain has led the government to tighten the measures, especially for the population that is not vaccinated, restricting access to recreational activities. On United Kingdom, the mask will once again be mandatory, at least in shops and public transport.
“Not so immediately, we believe that risks related to the pandemic persist, especially with indications of the spread of the new Omicron variant, considering that due to the mutations it presents, it could result in a new wave of relevant infections, “said Juan Carlos Alderete.
For Ricardo Aguilar Abe, chief economist at Invex, the new strain of Covid-19 it is the main risk for employment. In that sense, it will be important to observe the studies on its transmission capacity and aggressiveness, as well as the effectiveness of vaccines.
“The Tourism sector de México should not register strong impacts if the impact of Ómicron is moderate. The reopening of trade and services has been key for employment in these sectors, as well as for the economic recovery in general ”, added the specialist.
Analysts agree that there are signs of recovery in the coming months of labor market, but the behavior of the pandemic is the most important factor for the improvement to be maintained.
“We will be very attentive to the performance in the coming months, with the possibility that the current momentum may moderate in case of observing a new rebound in cases”Said Juan Carlos Alderete.
Additionally, among the external factors that could harm the recovery of the labor market are the problems in the supply chains, which affected the fall in employment in manufacturing in October.
At press time, the only country in the American continent that has detected the first cases of the new variant is Canada, but Australia and eight nations of the European Union have already identified infections.