By Jason Lange
CUAUTITLAN IZCALLI, Mexico, May 26 (Reuters) - Mexico's jobless rate jumped in April close to a 13-year high -- a sign the country's economic downturn has yet to touch bottom as tens of thousands more factory workers lost their jobs.
The number of Mexicans out of work rose to 5.25 percent in April, higher than analysts had expected, the national statistics agency said on Tuesday.
Mexico's economy went into freefall this year as U.S. demand for its exports dried up, leading factories building everything from cars to air conditioners to lay off workers.
'It's a really tough situation around here. I've turned in at least 70 job applications this year,' said Sergio Valtierra, 26, as he left an employment office in Cuautitlan Izcalli, a factory town just north of the capital.
An alarming number of companies appear to have closed in Mexico recently, with nearly 11,000 firms disappearing from rolls tracking social security contributions since Mexico began its recession in October.
Mexico sends about 80 percent of its exports to the United States, where consumers have been battered by recession.
The April jobless reading was the second worst since September 1996, when Mexico was clawing its way out of a financial meltdown dubbed the Tequila Crisis. The jobless rate had hit 5.3 percent in February.
The rate of job losses in manufacturing has accelerated each of the 10 months through April, when nearly 24,000 people lost their factory jobs, social security data shows.
The woes that started in factories are now spreading through the wider economy as higher unemployment leads more people to cut back on spending.
DEEP RECESSION
For workers like Valtierra, who has been out of work since October and applied on Tuesday for a job as a delivery truck driver, it could get even harder to find work in the months ahead, said Arturo Vieyra, an economist at Citigroup's Mexican subsidiary.
'It's going to get worse,' Vieyra said. He said Mexico's unemployment rate, which tends to lag changes in factory output by several months, could peak as late as September.
Mexico's economy contracted 8.2 percent in the first quarter of 2009 from a year earlier, after shrinking 1.6 percent during the previous quarter. The government does not expect a return to growth until at least the fourth quarter.
The Finance Ministry expects the economy will contract about 5.5 percent this year, the sharpest decline since 1995.
Unemployment was 4.76 percent in March.
Industrial output fell for eight straight months through March. A flu outbreak that caused a shut down of wide swaths of the economy for five days in May will also drag on growth, Vieyra said.
Employment agency Manpower is receiving nearly twice as many applications for every job opening it announces at its Cuatitlan Izcalli office these days compared to late last year, said Ricardo Gorostieta Leal, who manages the company's industrial accounts in Mexico City and the factory zone to the capital's north.
Claudia Segura, 27, said she has been out of work since January when her position was eliminated at a mortgage company, and her father has struggled for months to get carpentry work.
'I need a job urgently,' she said as she went to apply for a secretary position in the capital.
(Editing by Leslie Adler) Keywords: MEXICO ECONOMY/ (jason.lange@thomsonreuters.com; +52 55 5282 7151; Reuters Messaging: jason.lange.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
CUAUTITLAN IZCALLI, Mexico, May 26 (Reuters) - Mexico's jobless rate jumped in April close to a 13-year high -- a sign the country's economic downturn has yet to touch bottom as tens of thousands more factory workers lost their jobs.
The number of Mexicans out of work rose to 5.25 percent in April, higher than analysts had expected, the national statistics agency said on Tuesday.
Mexico's economy went into freefall this year as U.S. demand for its exports dried up, leading factories building everything from cars to air conditioners to lay off workers.
'It's a really tough situation around here. I've turned in at least 70 job applications this year,' said Sergio Valtierra, 26, as he left an employment office in Cuautitlan Izcalli, a factory town just north of the capital.
An alarming number of companies appear to have closed in Mexico recently, with nearly 11,000 firms disappearing from rolls tracking social security contributions since Mexico began its recession in October.
Mexico sends about 80 percent of its exports to the United States, where consumers have been battered by recession.
The April jobless reading was the second worst since September 1996, when Mexico was clawing its way out of a financial meltdown dubbed the Tequila Crisis. The jobless rate had hit 5.3 percent in February.
The rate of job losses in manufacturing has accelerated each of the 10 months through April, when nearly 24,000 people lost their factory jobs, social security data shows.
The woes that started in factories are now spreading through the wider economy as higher unemployment leads more people to cut back on spending.
DEEP RECESSION
For workers like Valtierra, who has been out of work since October and applied on Tuesday for a job as a delivery truck driver, it could get even harder to find work in the months ahead, said Arturo Vieyra, an economist at Citigroup's Mexican subsidiary.
'It's going to get worse,' Vieyra said. He said Mexico's unemployment rate, which tends to lag changes in factory output by several months, could peak as late as September.
Mexico's economy contracted 8.2 percent in the first quarter of 2009 from a year earlier, after shrinking 1.6 percent during the previous quarter. The government does not expect a return to growth until at least the fourth quarter.
The Finance Ministry expects the economy will contract about 5.5 percent this year, the sharpest decline since 1995.
Unemployment was 4.76 percent in March.
Industrial output fell for eight straight months through March. A flu outbreak that caused a shut down of wide swaths of the economy for five days in May will also drag on growth, Vieyra said.
Employment agency Manpower is receiving nearly twice as many applications for every job opening it announces at its Cuatitlan Izcalli office these days compared to late last year, said Ricardo Gorostieta Leal, who manages the company's industrial accounts in Mexico City and the factory zone to the capital's north.
Claudia Segura, 27, said she has been out of work since January when her position was eliminated at a mortgage company, and her father has struggled for months to get carpentry work.
'I need a job urgently,' she said as she went to apply for a secretary position in the capital.
(Editing by Leslie Adler) Keywords: MEXICO ECONOMY/ (jason.lange@thomsonreuters.com; +52 55 5282 7151; Reuters Messaging: jason.lange.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.