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Mexico Job Losses Reach a Record in April on Virus Lockdown

Mexico Job Losses Reach a Record in April on Virus Lockdown

(Bloomberg) -- Mexico lost 555,247 jobs in April amid a nationwide shutdown to stop the spread of the coronavirus, the worst monthly drop on record.

April’s formal job losses in Latin America’s second-largest economy are greater than all of the 342,077 jobs created last year. The number of employees registered with the nation’s social security institute began to fall in March as the lockdown began, dropping 130,590.

The jobs figures are a blow to the administration of President Andres Manuel Lopez Obrador, who has thus far resisted major stimulus spending and bailouts for Mexico’s largest companies. It also makes it less likely the president will achieve his pledge to create 2 million jobs this year.

The Mexican peso extended the day’s loss after the news, cementing the worst performance in emerging-markets as it dropped 1% on the day.

Mexico Job Losses Reach a Record in April on Virus Lockdown

“The loss of formal jobs is likely to continue in May, though the pace may slow,” said Carlos Capistran, an economist at Bank of America in New York.

The combination of falling oil prices and the rapid spread of the coronavirus have hammered Mexican growth prospects and led to sovereign downgrades at all three major rating companies. Analysts including Capistran say that in order to contain the pressure on the economy, Lopez Obrador needs to put together a far more aggressive stimulus plan.

©2020 Bloomberg L.P.