Unemployment recedes to the lowest level of the pandemic; market moderates advance

Although it moderated its pace compared to last month, the labor market maintained its recovery in November. According to the National Occupation and Employment Survey (ENOE), in the penultimate month 119,098 people were added to the employed population and, consequently, unemployment decreased to its lowest level in the entire pandemic.

The unemployment rate was 3.6%, reporting a reduction of 3 basis points compared to October. Unlike the occupation that recovered its level prior to the health emergency in July, unemployment took 21 months to return to the figures observed before the effects of the pandemic.

“The creation of employment and the reduction of the unemployed and available populations are reflected in improvements in the rates of open unemployment and extended unemployment (including the available population), which stood at 3.66% and 14.65%, respectively. Both rates are at their lowest levels since March 2020, ”explained Gabriela Siller, director of Economic and Financial Analysis at Banco Base.

For his part, Ricardo Aguilar Abe, chief economist at Invex, considered that although job creation will continue to rise, it is also likely that the number of people who are looking for work and cannot find it.

“For this reason, the unemployed could also increase. In other words, the unemployment rate could fluctuate around current levels while the economy’s recovery takes place, ”explained the specialist.

In contrast to the start of the last quarter of the year when the growth of the employed population was mostly concentrated in formality, in November 68% of job creation was linked to informality.

By activities, the agriculture, livestock and fishing sector had a loss of 368,658 jobs and is the one that presents the greatest lag in the number of employed people compared to its pre-pandemic levels.

Compared to October, when the industrial sector presented a slight reduction in employed personnel, at the end of the year this line added 417,159 workers, this increase was linked to the growth of employment in manufacturing that offset the falls in construction and the mining industry.

On the other hand, the services sector sustained its recovery during October, although at a more moderate pace. The activities in this area gained 52,975 people to the employed population.

Social services that added 123,302 jobs, government activities with a growth of 104,935 jobs and a growth of 70,833 places in restaurants and accommodation services cushioned the contractions in activities in commerce, transportation and professional services, the latter group with the greater loss reducing its employed personnel by 180,964.

“According to economic activity, the sector with the greatest lag in terms of employed personnel is the primary sector, which employed 448,439 thousand fewer people as of November than in the month prior to the pandemic. However, in relative terms the lag is greater in government employment and international organizations, with a difference of 8.49% compared to February 2020 ”, pointed out Gabriela Siller.

Among other positive aspects, a decrease in the underemployed population was also observed, which includes employed personnel with reduced working hours and with the need for more working time. This rate fell five basis points compared to October to settle at 10.48%, its lowest level so far in the pandemic.

Medium-term prospects

From Ricardo Aguilar’s point of view, although the economic outlook is positive and, therefore, a better environment is expected for the labor market, it is likely that as a result more people will go looking for work, but will find fewer available vacancies.

“The main risk that employment could face in the short term are new restrictions on mobility due to an increase in COVID-19 cases in Mexico due to the arrival of the omicron variant. For now there is no rebound in cases and the authorities have reiterated that there will be no stoppages of activity until they have more information on the impact of the new strain, “said the specialist.

Gabriela Siller has the same perception, the effects of the Ómicron variant in a possible fourth wave of infections create a panorama of uncertainty for the labor market in the short term.

“The response from the authorities at the global level has been precautionary and immigration restrictions have been imposed in various parts of the world. In the case of Mexico, existing sanitary measures have not been strengthened and economic activities are not expected to be suspended. However, economic activity could be affected by voluntary measures on the part of consumers or private initiative ”, he stated.


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