Mexico’s Historic Low Unemployment and Informality

In December, the country’s unemployment rate hit a historic low of 2.6%, as reported by the National Survey of Occupation and Employment from Inegi. The total unemployed population decreased by 59,000 compared to December 2022, reaching 1.6 million individuals. Juan Carlos Alderete, the Executive Director of Economic Analysis and Market Strategy at Grupo Financiero Banorte, attributes these figures to a significant consolidation of the labor market, driven by robust domestic demand and potential structural changes, notably the nearshoring effect.

The employed population in Mexico increased by 1.2 million over the year, totaling 59.1 million. Of these, 70% worked as subordinated and remunerated employees, while 21.7% were independent workers. The services sector employed 43.6% (25.8 million), commerce 19.5% (11.5 million), and the manufacturing industry 17.1% (10.1 million).

The year 2023 witnessed the creation of approximately 1.2 million job positions, contributing to the lowest-ever recorded unemployment rate of 2.6% in December, according to the National Survey of Occupation and Employment (ENOE) by the National Institute of Statistics and Geography (Inegi).

In December 2023, 53.6% of the employed population, totaling 31.7 million, engaged in informal labor, marking a 1.3 percentage point decrease from December 2022. The suboccupation rate, indicating those willing to work more hours than their current jobs require, was 7.3%, affecting 4.5 million individuals.

Resumen en Español:

En diciembre, la tasa de desempleo de México alcanzó un mínimo histórico del 2.6%, según la Encuesta Nacional de Ocupación y Empleo del Inegi. Este hito refleja una consolidación significativa del mercado laboral, impulsada por la sólida demanda interna y posibles cambios estructurales, como el efecto nearshoring, según Juan Carlos Alderete de Grupo Financiero Banorte. La población empleada aumentó en 1.2 millones durante el año, alcanzando los 59.1 millones. El 70% trabajaba como empleados remunerados, mientras que el 21.7% eran trabajadores independientes. El sector de servicios concentró el 43.6%, el comercio el 19.5%, y la industria manufacturera el 17.1%. El empleo informal disminuyó a 53.6%, afectando a 31.7 millones, y la subocupación fue del 7.3%, afectando a 4.5 millones de personas.