Employment and inflation continues to rise

Global economists were recently encouraged by the release of the BLS’ “The Employment Situation – September 2012” report, which revealed that the United States’ national unemployment rate fell to its lowest level since January 2009, as 114,000 jobs were added to the national economy.
For the first time since President Barack Obama was inaugurated on January 20, 2009, it appears the nation’s joblessness is declining on a regular basis, as unemployment has contracted by 1.2 percent since September 2011 and 0.5 percent since July.

But, is a similar deterioration in unemployment also occurring in Canada? And, are there any signs that Mexico’s economic situation is currently improving as well?

Canada:
According to Statistics Canada, 17.6 million Canadians were employed in September, a rise of nearly 52,000, when compared to August’s figures. The upswing in hiring was not anticipated; in fact, such job creation has not been recorded since April, a month in which 58,000 new jobs were added to the national economy. Back in August, 34,300 jobs were created and, as recently as July, more than 30,000 jobs were actually lost. A majority of the new jobs were full-time positions; in all, nearly 44,000 full-time jobs were created in September, as the country’s total full-time employment rose to 14.3 million.

In spite of the employment increases, the national unemployment rate also augmented in September, for the first month since July, rising to 7.4 percent. The rate hike was likely a direct result of an increase in the national labor force, which rose by 72,600. Since September 2011, national employment has risen by one percent, as roughly 15,000 jobs have been added to the economy each month, on average.

As Canada’s employment situation continues to improve, national economists are also encouraged by the fact that core inflation is still near the Bank of Canada’s two percent central inflation target. As long as inflation remains near this target, the Bank of Canada will likely not lower its overnight target rate during the fourth quarter. Last month, the Bank retained all three of its rates, the overnight target rate, the bank rate, and the deposit rate, at one, 1.25, and 0.75 percent, respectively. Nonetheless, many economists believe that, due to weak exportation, the bank will not be able to retain rates at their current measurements throughout 2013; some economists have projected that rates will be raised during next year’s third or fourth quarters.

Mexico:
As has been the case throughout 2012, the Banco de Mexico retained its central bank policy rate at 4.50 percent in September, despite a steady increase in inflation. Last month, the national Consumer Price Index (CPI) was measured at 105.7, a 4.8 percent rise from September 2011, according to the National Institute of Statistics and Geography. Total underlying inflation, core inflation, and noncore inflation has also increased since September 2011, rising by 4.1, 3.61, and 8.81 percent, respectively. Many economists currently believe that, as long as inflation continues to rise on a regular basis, and the national CPI remains above the bank’s target of three percent, monetary conditions will be tightened prior to the end of this year’s fourth quarter.

US:
For more information, please visit www.workplaceeconomy.com.

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