According to INEGI, the unemployment rate rose to 2.75% in non-seasonally adjusted terms in May, above both Bloomberg’s market consensus of 2.59% and our forecast of 2.50%. Using seasonally adjusted data, the unemployment rate was 2.71% in May, up from 2.54% in April and 2.62% a year ago. The increase was mainly driven by younger and older individuals, as well as those with minimal and extensive education.
Compared to last year, the number of employed increased by 154k in May, with a contraction of 213k in the formal sector and an increase of 367k in the informal sector. The labor participation rate stood at 59.5%, below last year’s 60.5% and to the pre-pandemic average for the same month, which was 60.2%. May’s informality rate slightly increased from the previous year at 54.9% compared to 54.4% but continues to trend down. Regarding wages, the real wage bill rose by 0.8% YoY due to a 5.0% YoY contraction in the number of employed people, and higher real wages during the month (+0.8% YoY).
Our view:Looking ahead, we anticipate that job creation will continue to decelerate, driven by the slowdown in economic activity and domestic and international uncertainty. We forecast an average unemployment rate this year of 2.9%, slightly above the 2.7% of 2024. Additionally, real wage growth is expected to remain positive, partially supporting private consumption. Global trade policy uncertainty is likely to limit labor demand.
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