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Trickle down economics not working so well:
Mexican Remittances Fell Most on Record in October
Dec. 1 (Bloomberg) — Mexican remittances dropped the most on record in October as the impact of the U.S. economic slump continued to spur job losses and sap savings for nationals living north of the border.
Money sent from workers living outside Mexico fell 36percent to $1.7 billion in October from $2.6 billion in the same month a year earlier, the central bank said on its Web site. The largest previous drop was a decline of 20 percent in May.
Remittances data compared with the prior year will remain negative until at least March as immigrants are having trouble replacing diminishing savings with new income because theyâ€™re unemployed, said Manuel Orozco, senior associate and director of remittances at the Inter-American Dialogue in Washington.
â€œIf savings drop over time and they donâ€™t find jobs, then the remittance capacity will drop,â€ Orozco said in a telephone interview.
Falling remittances wonâ€™t have a negative impact on Mexican consumer demand because money transfers have increased 8.5 percent so far in 2009 compared with last year due to depreciation of the peso, Gabriel Casillas, chief economist at JPMorgan Chase & Co. in Mexico City, wrote in a report today.