The Mexican labor market had a negative balance in August, with a slight increase in the unemployment rate. Manufacturing and restaurant work were the only sectors with job creation.
Mexico's labor market performed negatively in August, eliminating 626,770 jobs after starting the second half of 2024 with strong job creation, the best figure since October 2021, according to the National Survey of Occupation and Employment (ENOE). As a result, so far this year the cumulative creation of jobs is 788,412.
The drop in employment is the second worst figure so far in 2024, despite this, employment has only had a negative performance on three occasions, largely due to seasonal factors.
The loss of employment was reflected in a slight monthly increase of 0.1 percentage points in the unemployment rate, which stood at 3.0% and increased for three consecutive months, bringing unemployment closer to its historical averages.
Thus, the decline in employment was reflected to a greater extent in an increase in the Economically Inactive Population (PNEA), to which just over one million people were added, the majority classified as “unavailable.”
“This may be due to various reasons, but it is important to bear in mind that most people who belong to this population are retirees, students or people who work at home. The sharp increase in the unavailable population suggests that job losses are not necessarily a deterioration in the labour market,” says Gabriela Siller, Director of Economic and Financial Analysis at Banco Base.
74.7% of the jobs eliminated were concentrated in the informal sector. Formal employment experienced a more moderate reduction, with a contraction of 158,414 positions.
“It is very common to observe decreases in the informality rate when the employed population decreases by large amounts, since there is less stability for workers in the informal market. However, despite the decrease, the rate is still at high levels, and the promotion of formal employment represents one of the most important challenges for the current six-year term,” says Gabriela Siller.
As a result, the informality rate fell slightly on a monthly basis from 54.5 to 54.3 percent. So far this year, the indicator has grown by 0.7 percentage points.
On the other hand, subordinate work was the sector with the greatest decline, with a decrease of 410,239 jobs, followed by employers (-255,917). Self-employment was the only sector with growth, adding 129,359 people to the employed population.
MANUFACTURING AND RESTAURANTS, THE "LONE RANGERS"
By economic sector, the only one that had a positive performance was the industrial sector. Within this, manufacturing is the sector that generated employment, adding 388,499 to the employed population and cushioning the fall of 185,114 jobs in the construction sector.
Service activities were the ones that reported the greatest job losses. Only restaurant work showed a positive balance with 301,460 jobs, the rest of the subsectors had negative figures, especially social services (-420,316), government (-211,729) and commerce (140,254).
The reduction in employment levels was complemented by activities in agriculture, livestock and fishing, with the elimination of 226,815 jobs.
