Mexico | Formal employment creation in 2025 masks underlying weakness

Summary

In 2025, formal employment grew by 1.3%; however, excluding digital platform workers, growth slowed to just 0.3%. Weak investment, deteriorating business confidence, and job losses in key sectors are constraining total wage growth and, in turn, household income.

Key points

• Key points:
• The growth in formal employment observed in 2025 is largely driven by the formalization of digital platform workers, which boosts IMSS affiliation but does not imply a real expansion of employment.
• Job losses were concentrated in key sectors such as manufacturing and construction, while sectoral growth was driven mainly by commerce and showed signs of weakening in services.
• The prolonged contraction in agricultural employment points to persistent challenges in the generation of formal jobs in primary activities.
• Lower job creation has begun to be reflected in a slowdown in total wage growth and household income, limiting the dynamism of private consumption.
• Looking ahead, a gradual improvement in formal employment is expected; however, without a sustained recovery in investment and business confidence, the labor market will remain far from regaining solid momentum.

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