Record Enrollment Masks Job Market Weakness

Mexico's social security institute, the IMSS, reported a loss of 29,922 formal jobs in May, a 0.1% decline from April. Despite the monthly setback, total registered workers reached 22,718,681 at month's end, the highest level ever recorded for May.

Annual growth tells a different story. Formal employment expanded 1.5% year-over-year, adding 346,637 positions over the last twelve months, according to El Financiero. This metric matters because it signals Mexico's ability to create formal jobs with access to social security coverage.

Seasonal Agriculture and Manufacturing Drag

The IMSS blamed the monthly drop on agricultural seasonality, citing the closure of planting and harvesting cycles. A second factor was the cancellation of one employer registry involved in fictitious labor arrangements.

The data split reveals strain in permanent positions. According to Bloomberg Línea, permanent jobs fell by 32,471 while temporary positions rose by 2,549.

Regional performance was uneven:

Economists Weigh In

Alberto Alesi of ManpowerGroup downplayed expectations for a World Cup boost to hiring, noting the May decline was smaller than the 45,624 jobs lost in the same month last year.

UNAM economist Willebaldo Gómez Zuppa acknowledged that May through July typically see fewer workers due to agricultural cycles. However, he attributed this month's steeper decline to manufacturing adjustments.

What's Next

The IMSS releases monthly updates on formal employment tied to social security coverage. Coming reports from the institute and Mexico's National Survey of Occupation and Employment will indicate whether job creation regains momentum in the second half of the year, particularly as activity remains tied to external demand.

**Sources:**