Mexico | Formal employment stumbles in January and extends the weakness

Summary

Formal employment began 2026 with a monthly decline and the weakest start since 2009, confirming slower momentum. Low confidence and falling investment are holding back the recovery in employment, while real wages continue to support the wage bill and consumption.

Key points

• Key points:
• Formal employment fell 0.17% month-over-month in January (-8 thousand jobs), marking the weakest start to a year since 2009 and confirming that formal labor market weakness extended into early 2026.
• Business confidence remains in pessimistic territory (48 points) and has spent 11 consecutive months below the 50-point threshold, limiting investment; in this context, gross fixed investment fell 5.7% year-over-year in November, affecting the recovery in employment.
• Manufacturing (-2.1% year-over-year in January) has recorded 13 consecutive months of contraction, while services show a marked slowdown, explaining the weak employment performance.
• Regional disparities persist: the Metropolitan area (Mexico City and the State of Mexico) drives job creation, whereas the manufacturing north and the south-southeast remain weak.
• Real wages are rising 3.4% year-over-year and support the wage bill (4.3%), but the boost comes mainly from early-year wage revisions rather than stronger job creation.

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