Mexico | First half of the year marked by weakness in formal employment

Summary

Formal employment stagnated in June, closing Q2 with negative growth. This reflects weakness in key sectors, declining investment, and deteriorating expectations, all of which contribute to an adverse environment that could impede short-term labor market recovery.

Key points

• Key points:
• In July, formal employment posted zero annual growth and a seasonally adjusted monthly variation of (-)0.1%. As a result, the first half of the year closed with an accumulated growth of 0.4%, the lowest for this period since 2002, excluding 2009 and 2020.
• Job losses were concentrated in key sectors, particularly construction and manufacturing, which continued to register consecutive annual contractions.
• The services sector, despite showing an annual growth of 1.4%, has begun to lose momentum. Monthly employment figures have been nearly stagnant since February, and June recorded a 0.15% decline, signaling the sector’s gradual weakening.
• The slowdown in formal employment is spreading across the country, with an increasing number of states recording annual declines and pronounced disparities within regions.
• In June, real wages posted an annual increase of 3.1%. This growth is similar to that of the real wage bill, which shows signs of deceleration and stagnation, a trend that could negatively affect household consumption over time.

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