After a record-setting month of March in which Mexicans working abroad sent US $4.02 billion back home, Mexico’s central bank reports that the amount plummeted by 28.5% in April to $2.86 billion.
The remittances help support the basic needs of an estimated 10 million Mexicans. The average amount sent in April was $329, down from $377 in March, according to the Bank of México.
April’s decline is the largest monthly decrease since November 2008, yet still roughly equal to money sent back to Mexico in April 2019.
The March total was up 39% over the same month last year.
Explaining the spike in March may be more difficult than the decline in April. “The significant acceleration in remittances in March is difficult to square with labor market conditions and sentiment in the United States,” said Alberto Ramos, chief economist for Mexico at Goldman Sachs.
Most of those Mexicans sending money back home work in the United States, where the unemployment rate in April skyrocketed to 14.7% of the population, an increase of 10.3% over March, the U.S. Bureau of Labor Statistics reported.
Jonathan Heath, deputy director of Mexico’s central bank, said that although remittances decreased in April, “the purchasing power of remittances over the last 12 months managed to increase 7.7% in April compared to the previous year,” if tabulated in pesos, he said on his Twitter account.
“As far as this news is concerned, it is good,” he wrote. “There was no collapse due to the significant increase in the unemployment rate of Latinos in the United States.”
In the first quarter of 2020, remittances to Mexico totaled US $12.16 billion, a 12.6% increase over the same time period in 2019.