Latin American Economic Perspectives: Mexico: A More Precarious Labour Market

Research evidence excerpt

Latin American Economic Perspectives: Mexico: A More Precarious Labour Market

Global Research

13 July 2026ab

Latin American Economic Perspectives Economics

AmericasMexico: A More Precarious Labour Market

Rafael De La Fuente

Economist

IMSS employment has picked up, but remains lackluster rafael.delafuente@ubs.com

+1-203-719 7127

The weakness in the Mexican economy is reflected in the softness of its labour market.

Last year, the economy generated a mere 279k formal sector jobs as measured by Andrea Casaverde

Economistregistrations in the Mexican social security system (IMSS), only 65k more than in 2024,

andrea.casaverde@ubs.com

itself the weakest on record for job creation in the past 20 years, excluding COVID and +1-203-713-2515

the Great Financial Crisis (Fig 1). Through June of this year, job creation has picked-up,

but is still on track to deliver lackluster growth (Fig 2). Moreover, over one third of IMSS Roque Montero

Strategist

jobs created in the past year were of a temporary nature (Fig 3), far outweighing the

roque.montero@ubs.com

share of temporary jobs in total formal employment (13%), and the overall job growth +1-203-719 2112

numbers are inflated by the inclusion of digital platform into the Mexican social security

system since the middle of last year. The absence of a more dynamic job market is

weighing on aggregate household income (see our augmented wage mass growth

measure in Fig 5), and by extension, on private consumption.

ENOE household survey points to rising labour informality

The weakness in the labour market is even more apparent when looking at the ENOE

household survey data. As Fig 6 shows, formal sector job growth as measured by the

ENOE has underperformed the growth of IMSS jobs (the ENOE definition of formal