Mexico’s Job Market Weakens in November: Employment Falls and the Available-to-Work Population Rises
Mexico’s labor market showed signs of cooling in November after the unemployment rate came in at 2.69%—its highest level since September—according to INEGI’s National Survey of Occupation and Employment (ENOE). The shift was accompanied by a month-over-month decline of 1.05 million in the employed population, a move that has revived the debate over how resilient job growth is heading into year-end.
The pullback was concentrated almost entirely in the informal sector: about 1.1 million people moved out of informality, while formal employment posted a marginal gain of 46,000 jobs, according to an analysis by Banco Base. Even with that slight monthly uptick, the year-over-year picture continued to show weakness: formal employment fell 0.63% and logged five consecutive months of declines—a streak that, because of its persistence, is often associated with periods of slower economic growth.
By contrast, informal employment posted essentially flat annual growth (0.02%), yet it has been enough to explain the net increase in employment observed in recent months. This composition matters because informality—still elevated in Mexico due to the structure of the productive base and the costs of transitioning into formality—is typically linked to less access to social security, greater income vulnerability, and a narrower tax base. In an environment where domestic consumption has been an important growth driver, job quality becomes key to sustaining demand.
By sector, weakness was most evident in secondary activities. Employment in that group fell 1.04% year over year, with declines in mining and utilities (-6.99%) and manufacturing (-1.43%); construction was the exception, rising 0.38%. In services, annual growth was nearly flat (0.07%), suggesting less momentum in a segment that typically absorbs a large share of the workforce and tends to respond quickly to changes in the economic cycle.
Another relevant indicator was the rise in the population outside the labor market. The Not Economically Active Population (PNEA) increased by 964,000 people and, within it, the “available” population—those who did not look for a job but would accept work—rose by 378,000 to 5.56 million. Banco Base estimated that if this group were included in a broader measure, the unemployment rate would climb to 10.73% in November, pointing to more slack than the traditional indicator suggests.
The macroeconomic backdrop helps put the move in perspective. In Mexico, formal employment is closely tied to the health of sectors such as manufacturing, logistics, and construction, as well as to investment. While the country has drawn attention due to supply-chain relocation (nearshoring), turning projects into reality depends on regulatory certainty, energy and infrastructure availability, and financing conditions. With interest rates kept at elevated levels in recent stretches to contain inflation, higher borrowing costs can moderate investment and hiring decisions, especially among small and mid-sized businesses.
In addition, manufacturing employment trends often mirror what is happening in the U.S. economy, Mexico’s main trading partner. Any slowdown in external demand—particularly for durable goods—can translate into fewer hours worked, payroll adjustments, or slower momentum in new hiring. At the same time, domestic consumption could face headwinds in an environment where employment grows but tilts more toward informal jobs or positions with less stability.
Looking ahead to the coming months, attention will be on whether the monthly drop in employment reflects a temporary adjustment—such as seasonality or one-off measurement changes—or whether it signals a more sustained moderation in the labor market. It will also be important to track the balance between formal and informal work, as well as the trajectory of the “available” population, because that group can put pressure on social and wage indicators if it does not translate into actual employment. For companies, the challenge will be maintaining productivity and margins in a slower-growth environment; for public policy, the conversation remains focused on how to make formalization easier, raise skill levels, and create conditions that attract long-term investment.
In perspective, November delivered a mixed signal: while the unemployment rate remains low by historical standards, the size of the drop in employment, the persistence of year-over-year declines in formal jobs, and the increase in the available population suggest a loss of momentum. How the year closes and how the next one begins will depend on the strength of consumption, investment, and external demand, as well as on the ability to turn productive opportunities into formal, sustainable employment.
