Mexico: Recovery in U.S. labor market support Mexican remittances
February 3, 2015
In December, remittances from Mexican workers abroad totaled USD 2.19 billion. The reading came in above the USD 1.85 billion observed in the same month of the previous year and also overshot the USD 1.90 billion the markets had expected. The print marked a notable increase in year-on-year terms. Remittances shot up 18.8% annually in December (November: +2.5% year-on-year), marking the fastest increase since September 2011.
Remittances’ strong increase in December pushed full-year 2014 inflows to USD 23.6 billion, which was above the USD 21.9 billion registered in 2013. The reading represented a 7.8% expansion in 2014.
Mexico’s remittances benefited from gradual recovery in the U.S. economy, and particularly the U.S. labor market. Remittances are likely to continue growing this year, as the U.S. labor market continues to recover. However, remittances are still short of the peak that occurred in 2007, when remittances totaled USD 26.1 billion.
Author: Ricardo Aceves, Senior Economist