WRAPUP 2-Mexico’s inflation and jobless rate climb

* Mexico inflation 1st half Oct +0.48; poll +0.38

* Mexico core inflation matched poll at +0.18

* September jobless rate climbs to 5.7 pct; poll 5.35 pct

By Patrick Rucker and Luis Rojas
(Adds background on data)

MEXICO CITY, Oct 22 (BestGrowthStock) – Mexican consumer prices
climbed slightly more than expected in the first half of
October, while the unemployment rate rose in September as Latin
America’s No. 2 economy struggles out of a deep recession.

Inflation (MXCPIF=ECI: ) rose 0.48 percent in the first two
weeks of October, topping here analysts’ expectations of a 0.38
percent uptick. Core prices (MXCPIH=ECI: ), which strip out some
volatile food and energy prices, were in line with
expectations, climbing 0.18 percent, the central bank said in a
report on Friday.

The unemployment rate (MXUNR=ECI: ) rose more than expected to
5.7 percent in September, the national statistic agency said.
Analysts had forecast a 5.35 percent rate.

With the latest data, annual inflation is now 3.89 percent
— above the 3 percent official target set by the central bank
but below policy makers’ earlier forecast of a 4.75-5.25
percent rate through the close of the year.

Analysts expect the central bank to hold its benchmark
lending rate at 4.5 percent deep into next year with the hope
that relatively cheap lending will lift the battered economy.

The Mexican economy could grow by as much as 5 percent this
year, central bank chief Agustin Carstens has said, after
contracting 6.5 percent in 2009, but analysts expect listless
growth of 3.5 percent next year.

Weak growth next year would mean fewer jobs created.

The seasonally adjusted unemployment rate (MXUNEM=ECI: ) rose
to 5.3 percent in September from 5.2 percent a month earlier,
reversing a three-month trend of declines, the national
statistics agency said.

The seasonally-adjusted unemployment rate has recovered
from its crisis-high of 5.97 percent in September 2009, but
remains well above the 3.94 percent rate seen in September
2008.

Mexico’s economic fate is closely tied to that of the
United States, which absorbs roughly 80 percent of Mexican
exports, meaning an uncertain picture north of the border has
led to uneven signs of recovery in Mexico.

The statistics agency also said Mexico posted a $560
million trade deficit (MXTBAL=ECI: ) in September after a deficit
of $700 million in August.
(Editing by Leslie Adler)

WRAPUP 2-Mexico’s inflation and jobless rate climb