2025/08/28 | Julia Passabom & Mariana Ramirez
According to INEGI, the unemployment rate fell to 2.77% in non-seasonally adjusted terms in July, below both Bloomberg’s market consensus and our forecast of 2.86% and 2.87%, respectively. Using seasonally adjusted data, the unemployment rate declined to 2.56% in July, down from 2.62% in June and 2.71% a year ago. This result was due to the increase in the economically active population, which was greater than the rise in the unemployed population.
On an annual basis, the number of employed individuals increased by 475 thousand in July, with growth coming solely from the informal sector. The labor participation rate stood at 60.2%, lower than last year's 61.0% and slightly below the pre-pandemic average for the same month, which was 60.5%. July’s informality rate spiked to 56.1% from 54.5% the previous year, marking the highest rate since December 2021. We still lack information on why there was such a significant rise in informality. Other statistics, such as access to social security benefits and employment in the transportation sector, also decreased during this month. This contrasts with what the IMSS published for the same period, with a significant increase in formal employment related to the pilot program for the formalization to digital platform workers. Regarding wages, the real wage bill rose by only 0.4% YoY due to a 3.3% YoY contraction in the number of employed people and higher real wages during the month (+3.8% YoY).
Our view: In July, a pilot plan for workers on digital platforms was implemented in compliance with the recent labor reform. This created a distortion in the IMSS registration for the month (formal employment), which was not offset by the increase in informal employment published today. Looking ahead, we anticipate that job creation will continue to decelerate due to the slowdown in economic activity, in the context of elevated trade-related policy uncertainty. We forecast an average unemployment rate of 2.7% for this year. Real wage growth is expected to remain positive, partially supporting private consumption. However, global trade policy uncertainty is likely to limit labor demand.
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