On November 2nd, the BLS released its latest “The Employment Situation” report, providing further evidence that the United States’ economic recovery is occurring at a steady pace. According to the report, the nation added 171,000 new jobs to the national economy in October – the fourth consecutive month in which more than 100,000 jobs had been generated.
In early November, the United States’ neighbors to the north, Canada, and south, Mexico, also released statistics regarding employment, inflation, bank rates, and firm demand. Were such figures as positive as the United States’ employment data though? Did Canadian employment and firm demand rise last month? And, did the Central Bank of Mexico finally lower its policy rate?
After July’s disappointing employment data was released to the national public, which revealed a loss of roughly 30,000 jobs, Canada generated more than 40,000 new jobs per month, on average, from August to September. Such robust growth led many global economists to believe employment would continue to increase at a similar pace in October. However, according to the nation’s latest employment figures, job growth actually stalled last month, as only 1,300 new jobs were created. This sudden decline in employment directly influenced the nation’s civilian labor force, which only rose by 18,000. To compare, the labor force had risen by 72,600 and 30.500 in September and August, respectively. Despite the declines, the nation’s labor force was still 1.4 percent higher last month than in October 2011. In addition, the national unemployment rate remained unchanged, at 7.4 percent, for the second consecutive month.
The nation’s seasonally adjusted Ivey Purchasing Managers’ Index also weakened from September to October, falling from 60.4 to 58.3, its lowest level since July. Although firm demand rose at a slower pace last month than in September and August, more firms reported higher purchases in October than September; any value above 50 indicates a rise in firms’ purchases. The decline in the index may have been directly related to the month-to-month decrease of three of the index’s four sub-indices – inventories, suppliers, and prices. Nevertheless, as the index has remained above 50 throughout 2012, a majority of economists believe firms’ purchases will continue to rise this winter.
Even though hiring surprisingly declined in Canada last month, inflation continued to rise in Mexico, as the Consumer Price Index (CPI) augmented from 105.7 in September to 106.3 in October. But, when compared to September’s figures, annual inflation decreased last month. In September, year-to-year inflation rose by 4.8 percent; in comparison, inflation increased by 4.6 percent from October 2011 to October 2012. Despite a slight deterioration in annual inflation from September to October, total underlying inflation and underlying inflation-goods remained unchanged, as each index has risen by 4.1 percent since October 2011.
The steady rise in inflation remains an issue for the Central Bank of Mexico, as its policy board considers whether or not the central bank rate should be lowered for the first time in more than three years. Last month, during its seventh meeting of the year, the board decided to retain the rate at 4.5 percent for the 39th straight month. But, this trend may end soon. With annual inflation well above the bank’s target of three percent, many global economists believe the board will lower the rate by early 2013.
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