**Slowdown in the U.S. Impacts Employment and Growth in Baja California: Expert**
**By**: Editorial Team
**Date**: August 12, 2024
**Introduction**
The recent economic downturn in the United States is showing significant effects in Mexico, particularly in Baja California. According to economic analyst Roberto Valero, indicators like the drastic fall in Japan’s stock market on August 5 and the rising unemployment in the U.S. suggest a looming recession. Baja California is experiencing slower growth, job losses, and inflation pressures partly due to a stronger dollar.
**Economic Context**
The economic slowdown in the U.S. has been palpable in Baja California, with recent data indicating a decline in employment and formal economy patterns. Inflation continues to pose challenges, further exacerbated by the rising dollar. Last Monday, the U.S. dollar surpassed 20 pesos at bank counters, although it stabilized to around 18.90 pesos by August 8. Valero foresees the U.S. dollar potentially reaching 22 pesos, driven by upcoming U.S. presidential elections, geopolitical conflicts, and domestic legal changes.
**Implications for the Labor Market**
In July 2024, the U.S. unemployment rate increased to 4.3%, higher than expected, with only 114,000 new jobs created compared to 179,000 in June. California’s unemployment rate has been above 5% since December 2023, and Baja California has seen four consecutive months of job losses. In July alone, the region lost 6,969 jobs, bringing the four-month total to 17,408—a level not seen since the 2008 financial crisis.
**Employment Trends**
While the Mexican Social Security Institute (IMSS) reported the creation of 12,344 jobs in July, breaking a two-month negative trend, the year-to-date figure of 307,402 formal jobs is nearly 40% lower than the same period in 2023. This figure is also less than the 345,705 jobs lost in December 2023.
**Economic Growth**
Mexico’s GDP grew by 1.1% annually and 0.2% quarterly in Q2 2024, according to preliminary data. Economic forecasts by Banco Base and CitiBanamex have been revised downward, predicting national growth of 1.3% and 2.1% respectively for this year. Valero warns that Mexico’s economic slowdown could be more severe if Donald Trump wins the U.S. presidency, as his policies may encourage businesses to relocate to the U.S. Baja California’s economy contracted by 1.3% in Q1 2024 compared to the previous quarter, with zero annual growth. The state saw a significant decrease in primary (agriculture) and secondary (industry) activities.
**Inflation**
Despite remittances, Baja California’s economic stagnation is evident, with the local economy affected by a decreased purchasing power among U.S. workers. Inflation remains a challenge; in July, it increased to 5.57% annually, further fueled by rising food and fuel prices. Tijuana faced an even higher inflation rate of 6.46%. The Bank of Mexico reduced the Interbank Interest Rate from 11% to 10.75%, a controversial move given the persistent inflation.
—
**Secondary Article: Rising Unemployment in the U.S. has Global Implications**
Adding to the discussion, recent data shows that the U.S. labor market added fewer jobs than anticipated in July 2024, fueling concerns about a broader economic downturn. The unemployment rate in the U.S. rose to 4.3%, with only 114,000 jobs created, far below the expected 179,000. According to reports, this is impacting global markets and economies reliant on the U.S.
The link between the U.S. economic slowdown and the job market is evident in Baja California, where prolonged unemployment and economic contraction are becoming the norm. Analysts believe that upcoming U.S. elections and geopolitical conflicts could further exacerbate these issues.
John Williams, President of the Federal Reserve Bank of New York, stated recently that U.S. economic growth might slow down more significantly than predicted, raising alarms for both national and international markets. Such a scenario could shift monetary policies and affect global economic stability, impacting regions like Baja California more severely.
**Conclusion**
With the economic clouds gathering, it is essential for stakeholders and policymakers to prepare for potential prolonged economic challenges, including managing resources better and avoiding unnecessary debts.
For detailed analysis and continuous updates, visit TJGringo.com
**Further Reading**:
– ” Japan Stock Market Faces Historic Plunge Amid Global Economic Concerns”
– “U.S. Elections and Global Economic Stability: What to Expect”
– “Inflation Woes: How Rising Costs Are Impacting Everyday Life”
Stay tuned for more in-depth analysis and updates on the economic impacts on TJGringo.com!