Mexico: Remittances gain momentum in November as U.S. labor market continues to strengthen
January 4, 2016
November recorded another month of positive news for Mexico’s remittances. Transactions totaled USD 1.9 billion in November, which slightly overshot the USD 1.8 billion the markets had expected. This result represented a 6.3% year-on-year increase and marked an acceleration compared to the 1.3% rise registered in October.
Remittances from Mexicans abroad continue to be supported by the gradual improvement in the U.S. labor market, in particular in the construction sector. U.S payrolls in the construction sector, which is a proxy of hiring dynamics in the labor market with a high proportion of Mexican workers, continued to show healthy growth in November.
The rolling 12-month sum of remittances totaled USD 24.8 billion in November, which marked a 6.7% increase compared with the same period of the previous year. The increase followed the 6.4% expansion tallied in the 12 months up to October. As there is more evidence that the U.S. labor market is gradually improving, remittances are slowly approaching pre-crisis levels and the peak that occurred in 2007, when they totaled USD 26.1 billion.
Author: Ricardo Aceves, Senior Economist