Mexico | Formal employment fails to reverse slowdown in February; downward trend persists

Summary

In February, formal employment in Mexico slowed down due to uncertainty stemming from potential U.S. tariffs, negatively impacting business and consumer expectations. Nevertheless, real wages and the real wage bill continue to support consumption.

Key points

• Key points:
• Formal employment grew only 0.6% year-over-year in February, significantly below the previous year's 2.9%. On a monthly basis, February recorded the smallest positive variation in formal employment since 2010 (0.05% s.a.).
• Uncertainty surrounding potential U.S. tariffs has deteriorated business confidence, reducing investment and formal employment growth.
• Manufacturing (-0.2%) and construction (-6.8%) sectors experienced significant annual employment declines, adversely affecting overall employment figures.
• Thirteen states exceeded the national average for employment creation, with the Estado de México and Nuevo León standing out, whereas Ciudad de México performed below the national average.
• Although the real wage bill still shows growth (4.3% annually), the employment slowdown could negatively affect its dynamics and pose significant risks to consumption in the coming months.

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