Employment made a strong recovery in October after two months of declines, adding 1.2 million people to an occupation. This increase was driven by both self-employment and the service sector, which strengthened with the start of the year-end season with hiring prior to Good End.
According to data from the National Occupation and Employment Survey (ENOE), at the beginning of the fourth quarter of the year the unemployment rate decreased from 4.18 to 3.95%, which suggests a better environment in the labor market.
“We think that the improvement is mainly explained by a consolidation in the conditions around the virus, with even more moderate levels of infections relative to September and with the ‘traffic light’ allowing a greater reopening of activities,” said Juan Carlos Alderete, director of Banorte Economic Analysis.
Meanwhile, the expanded unemployment rate, which considers the unemployed and the inactive available for work, fell from 16.3 to 14.9% compared to September, registering the lowest level since the impact of the pandemic in Mexico began in March of last year.
“The available population has gained relevance in this economic crisis of the pandemic, given that the loss of jobs has occurred in a context in which it is almost impossible to find a new one given the restrictions on economic activity. For this reason, the extended unemployment rate is a better indicator of the evolution of employment in Mexico, ”said Gabriela Siller, director of Economic and Financial Analysis at Banco Base.
In the recovery in October, the services sector was responsible for 85% of the growth in employment. Within this category, the activities in commerce and restaurants contributed the highest amount of profits with a joint growth of 944,000 seats. Social services and the government were the only lines in the sector that decreased in jobs.
“Like the loss that occurred in the previous two months, this dynamic would have been caused by the status of the epidemic in our country, in addition to the seasonal effects caused by the proximity of the Good End season,” explained Marcos Daniel Arias Novelo, Monex economic analyst.
Activities in agriculture, livestock and fishing also contributed to October’s earnings with an increase of 265,372 places. But the industrial sector reported a loss of 48,099 jobs, a contraction driven by a drop in manufacturing employment.
“We continue to think that it is positive considering that some challenges persist, with many sectors still forced to comply with distancing measures while the industry continues to be affected by supply problems. Thus, we will continue to be attentive to the possible rebound in the following months, with additional signs of an improvement in economic activity, “said Juan Carlos Alderete.
Among the positive points for the labor market, it stands out that 69% of the increase in jobs was concentrated in the formal sector, which represents a greater amount than the more than 179 places registered with the Mexican Institute of Social Security (IMSS) during the same month. As a result of the strengthening of formality, the informality rate decreased six basis points with respect to September to settle at 55.6 percent.
Likewise, the underemployment rate, which includes people who work short hours, fell from 12.3% to 11.1%, its lowest level so far since the pandemic, but still above its proportion prior to the health emergency.
“One way to estimate the number of people affected by the pandemic at work is by adding the increases in the unemployed, underemployed and available populations, with respect to their pre-pandemic levels. This measure reached a maximum of 21.7 million people affected in May 2020, and as of October 2021 it stands at 3.53 million after decreasing 1.39 million in the month ”, explained Gabriela Siller.
Red flags in recovery
60% of the increase in the employed population was concentrated in self-employment and 27% in the group of unpaid workers. The addition of more people to the workforce was accompanied by a slight drop in subordinate personnel.
In this way, subordinate and paid work is 833,333 places below its pre-pandemic levels, on the other hand there are 1.2 million employed in self-employment conditions of those who were reported before the health emergency.
On the other hand, growth was observed in all salary profiles, with the exception of the group made up of those who receive more than five minimum wages, which decreased by 64,240 positions. Meanwhile, 6 out of 10 people who joined an occupation did so in the line of up to a minimum wage and 26% joined an activity without receiving income.
From Juan Carlos Alderete’s perspective, the drop in income may be linked to the strong creation of jobs during October. It is likely that some people entered the labor market with lower perceptions. Pro is also a factor that can be linked to the rise in prices.
Reference-www.eleconomista.com.mx