| | |  Business News 
Mexico's Inflation and Jobless Rate Climb
 Patrick Rucker & Luis Rojas - Reuters
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October 25, 2010
Mexico City - 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 rose 0.48 percent in the first two weeks of October, topping here analysts' expectations of a 0.38 percent uptick. Core prices, 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 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 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 in September after a deficit of $700 million in August.
(Editing by Leslie Adler)
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