Mexico Holds OECD’s Lowest Unemployment Rate

Mexico recorded the lowest unemployment rate in the Organization for Economic Co-operation and Development (OECD) at 2.6%, driven by nearshoring, domestic demand, and hiring linked to the 2026 FIFA World Cup. While boosting services, construction, and manufacturing, tight labor conditions intensify talent shortages, increasing pressure on formalization, inclusion, and workforce development strategies.

Mexico recorded the lowest unemployment rate among the 38 member countries of the Organization for Economic Co-operation and Development (OECD) in January, at 2.6%, according to the Ministry of Labor and Social Welfare (STPS). The result reflects a tight labor market amid rising hiring expectations linked to economic expansion and preparations for the 2026 FIFA World Cup. The data highlights both short-term job creation opportunities and structural workforce challenges.

The STPS says the figures reflect “the solidity of the Mexican labor market and the dynamism of the national economy,” attributing the result to coordinated labor policies and ongoing efforts to strengthen employment conditions under President Claudia Sheinbaum. At the same time, private sector signals point to accelerating demand for labor. “The economic impact of the 2026 World Cup will be a relevant catalyst for employment and productive activity,” says Alberto Alesi, Managing Director, ManpowerGroup for Mexico, the Caribbean, and Central America.

Tight Labor Market Meets Expanding Demand

Mexico’s unemployment rate of 2.6% places it below other OECD economies such as Japan (2.7%) and South Korea (3.0%), underscoring the relative strength of its labor market. The result comes as Mexico benefits from sustained economic activity linked to manufacturing expansion, nearshoring trends, and domestic consumption.

Public policy has played a role in shaping these outcomes. Labor reforms, minimum wage increases, and expanded worker protections have been framed as part of a broader strategy to improve job quality while sustaining employment growth. STPS emphasizes that employment policy is not limited to job creation but also focuses on formalization and labor conditions.

However, labor market data shows mixed dynamics beneath the headline figure. According to the National Survey of Occupation and Employment (ENOE), more than 705,000 jobs were lost in January compared to December, reflecting seasonal volatility. In contrast, formal employment has continued to expand. Data from the Instituto Mexicano del Seguro Social (IMSS) shows that registered employment reached 22.7 million in February 2026, the highest level for that month on record.

In February alone, 182,778 jobs were created, marking the largest increase for that month since records began. Nearly 75% of the 174,674 jobs created in the first two months of the year were permanent positions, suggesting relative stability in formal hiring despite short-term fluctuations.

World Cup and Sectoral Shifts Drive Hiring Expectations

Hiring expectations are strengthening as Mexico prepares to co-host the 2026 FIFA World Cup alongside the United States and Canada. According to ManpowerGroup, 53% of employers plan to increase hiring between April and June, up from 38% in the previous quarter and 46% in the same period last year.

The tournament is expected to drive activity across tourism, construction, transportation, and services. Mexico will host matches in Mexico City, Guadalajara, and Monterrey, with infrastructure upgrades underway to support an influx of visitors. Authorities estimate that up to 5 million tourists could arrive during the event, with average daily spending of around MX$8,000 (US$452.79). 

Business groups project significant economic impact.  The Confederation of National Chambers of Commerce, Services, and Tourism (CONCANACO SERVYTUR) estimates that the tournament could generate up to MX$200 billion (US$11.22 billion) in economic benefits for Mexico, significantly above the federal government’s official estimate of MX$65 billion (US$3.65 billion). 

Hiring demand is strongest in regions linked to host cities. The Northeast and Western regions report hiring expectations of 49%, while Mexico City stands at 40%. Construction and real estate lead sectoral demand, with 53% of employers planning workforce expansion.

Infrastructure projects are already underway. Local authorities are upgrading transport systems, including light rail and metro networks, to improve connectivity to stadiums and manage visitor flows during the tournament.

Despite the positive outlook, analysts expect much of the employment generated by the World Cup to be temporary. Mexico City alone could create between 50,000 and 100,000 short-term jobs in hospitality, transportation, and related services. This surge in demand is likely to intensify existing labor shortages in operational roles.

Structural Gaps Highlight Talent Constraints

Beyond cyclical hiring trends, Mexico’s labor market faces structural constraints tied to talent availability. As investment accelerates in manufacturing, logistics, and services, companies report increasing difficulty filling operational and technical roles.

Óscar Santos, Founding Partner, Santos & Becker, argues that businesses must rethink how they approach workforce development. He notes that migrant and refugee inclusion has traditionally been treated as a corporate social responsibility initiative rather than a core business strategy.

According to Santos, this approach limits its potential impact. Integrating migrant labor into workforce planning, aligning it with operational KPIs and embedding it in corporate strategy can help address persistent labor shortages. Mexico hosts a significant population of working-age migrants, many with legal authorization to work and experience in sectors such as manufacturing, construction and services.

Institutional support is expanding. Associations such as the International Organization for Migration and the United Nations High Commissioner for Refugees have developed programs to connect companies with migrant talent through formal hiring channels. Private-sector initiatives, including the Tent Partnership for Refugees, promote best practices for workforce integration.

Inclusion and Workforce Transformation

Workforce inclusion efforts extend beyond migration. Companies are also advancing diversity strategies to expand talent pools. Kia México reports that women now represent around 30% of its workforce, above the global automotive industry average of about 24%.

The company has increased female participation across operational, technical, and leadership roles, supported by initiatives focused on professional development and workplace inclusion. Programs such as mentorship initiatives and outreach to students aim to encourage more women to pursue careers in manufacturing and engineering.

These trends reflect a broader shift in how companies approach workforce strategy, moving toward more inclusive models to address structural labor constraints.

Mexico’s position as the OECD country with the lowest unemployment rate reflects strong labor demand and ongoing economic activity. However, the same conditions that support low unemployment also create constraints for employers seeking to scale operations.

Short-term drivers such as the 2026 FIFA World Cup are expected to sustain hiring momentum, particularly in services and infrastructure. At the same time, long-term competitiveness will depend on how effectively companies address talent shortages, improve workforce retention, and expand access to underutilized labor pools.