Mexico’s economic recovery failed to maintain momentum last month as manufacturing exports tumbled and unemployment rose.
The trade deficit widened to $1.02 billion, the most in four months, the national statistics institute said on its website Friday. The jobless rate climbed to 4.45 percent before adjusting for seasonal variations, surpassing the median forecast of 4.27 percent by 19 analysts surveyed by Bloomberg.
As growth remains sluggish, most central bank board members have said the disadvantages of raising interest rates before the Federal Reserve lifts U.S. borrowing costs would outweigh the benefits, according to the minutes of their last meeting. May’s rise in unemployment and the biggest drop in manufacturing exports in two years show that Mexico’s economic recovery is modest, according to Barclays Plc and Bank of America Corp.
The economic data underline “that the recovery is still weak and volatile, and that the central bank is in no rush to hike rates on domestic considerations,” Carlos Capistran, chief Mexico economist at BofA, said in an e-mailed response to questions.
The trade deficit exceeded the $158 million shortfall that was the median analyst forecast. Manufacturing exports tumbled 6.6 percent in May from the previous month, the biggest decline since January 2013.
“This is a yellow warning light signaling that the recovery of the manufacturing sector could become softer than expected,” Marco Oviedo, chief Mexico economist at Barclays, said by e-mail.
The peso fell 0.6 percent to 15.5667 per dollar at 9:54 a.m. in Mexico City.