Two months ago, American economists were encouraged by the findings of the BLS’s “The Employment Situation – July 2012” report, which revealed that 163,000 new jobs were added to the national economy that month, the highest total recorded since March. The rise in hiring led some economists to believe the trend would continue in August, projecting the economy would generate up to 130,000 positions last month.
Unfortunately, in spite of their predictions, job creation actually stalled in August, as 96,000 jobs were generated. Nevertheless, the national unemployment and underemployment rates each declined last month, offering economists some encouragement as they look ahead to the future.
In the meantime, Canada’s latest employment statistics – and Mexico’s most recent inflation figures – were also released in early September. But what did the data reveal? Did Canadian employment continue to drop – or did job creation rise for the first time in months? Also, is there any indication that Mexican inflation is beginning to decline to more average levels?
For the first month since May, Statistics Canada reported a rise in monthly job creation in August, as the nation added 30,500 new jobs to the national economy. In all, 17.5 million Canadians were employed last month, an increase of 34,300, when compared to July’s figures. Although the rise in employment is encouraging, economists could not help but notice one downside to August’s jobs report – full-time employment fell for the first time since January, dropping by nearly 12,500. To compare, as recently as April and March, nearly 44,000 and 70,000 new jobs were added to the national economy, respectively. In spite of the decline, full-time employment was still 1.2 percent higher last month than it was in August 2011.
Economists were also encouraged by the nation’s latest Ivey Purchasing Managers’ Index, which rose for the second straight month in August. At 62.5, the nation recorded its highest index since March, as three of the index’s sub-indices remained above 50, signifying that, as anticipated, more firms had higher purchases in August than in July. However, only one of the sub-indexes, employment, augmented on a month-to-month basis in August, rising to 58.6. Although the other three sub-indices, inventories, suppliers, and prices, declined from July to August, each of the decreases were minimal. As a result of August’s positive findings, many economists believe firms’ purchases will continue to rise this fall.
As anticipated, Mexico’s Consumer Price Index (CPI) increased for the third straight month, rising to 105.3 in August, the largest total recorded in months. In addition, annual inflation continued to uptick last month, rising by 4.6 percent, from August 2011 to August 2012. According to the Banco de Mexico, total underlying inflation, underlying inflation – goods, and underlying inflation – services also upturned in August, rising by 4.1, 5.2, and three percent, respectively.
The Banco de Mexico’s annual inflation target is still four percent. If inflation does not decline in the coming months, the bank’s board of governors may have no choice but to alter the nominal funding rate, which, at 4.5 percent, has remained unchanged since 2009. The board of governors’ decision may be directly influenced by this December’s inauguration of president-elect Enrique Peña Nieto; consumer prices generally uptick during presidential inaugurations. If history repeats itself and prices do in fact continue to increase this fall and winter, inflation will remain above four percent at the end of 2012, leading the board of governors to possibly alter the rate this November or December.
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