Mexico Sheds 19,550 Formal Jobs in July as Wages Hit Record

Mexico's formal employment fell by 19,550 jobs in July 2026, a 0.1% monthly decline attributed by IMSS to seasonal factors, even as average wages reached a historic MX$673.9 daily high. The contraction interrupts an uneven 2026 hiring trend and matters for businesses because it signals continued volatility in Mexico's formal labor supply despite record affiliation levels near 22.8 million workers. Manufacturing and agriculture face annual declines, while transportation, platform-based services, and IMSS-registered wage growth remain the strongest indicators of labor market resilience for employers.  

Mexico's formal labor market shed 19,550 jobs in July, a 0.1% monthly contraction that interrupted the rebound registered in June, according to figures released Aug. 10 by the Mexican Social Security Institute (IMSS). Despite the pullback, the average base contribution wage climbed to a historic high of MX$673.9 (US$38) per day, and positions linked to digital platforms kept expanding one year after their formal incorporation into the social security system.

IMSS attributed the July decline mainly to seasonal effects, including the end of the school cycle and the downward phase of the agricultural cycle, factors that typically weigh on hiring during the month. The institute did not release a statement from a named official alongside the July figures, but the underlying data tells a steadier story: cumulative job creation between January and July reached 243,078 positions, of which 95.4% were permanent contracts, a ratio that points to continued employer confidence in longer-term hiring despite month-to-month volatility. The average wage also posted a nominal annual increase of MX$42.4, the fifth-largest gain recorded for the month of July since the institute began tracking the figure.

The July setback fits into an uneven pattern that has defined formal employment in Mexico throughout 2026. Job creation slowed sharply in the first quarter compared with 2025, the country lost close to 30,000 positions in May, recovered with 61,023 new jobs in June, and gave back roughly a third of that gain in July. At the close of the month, IMSS-affiliated positions totaled 22,760,154, the fourth-highest figure on record and the strongest ever for the month of July. That level builds on the record 22.78 million workers registered at the end of June, when the institute reported that wages were also outpacing inflation. Permanent positions alone reached 19,797,516 in July, the third-highest figure for any month in the historical series, with permanent contracts representing 87% of total affiliation and temporary contracts the remaining 13%.

Annual growth also decelerated. Formal employment expanded by 326,987 jobs over the past 12 months, an annual rate of 1.5%, down from the 2% pace recorded in June. By sector, transportation and communications posted the strongest annual gain at 7.5%, followed by the extractive industry at 4.3% and social and communal services at 3.3%. Agriculture contracted 5.6% year over year, and manufacturing fell 0.7%, continuing a pattern of weakness in export-oriented production. Among states, Baja California and Oaxaca led growth, both posting annual increases above 5.5%, outperforming the national average by a wide margin.

The number of registered employers also declined, to 1,013,054, a drop of 2,046 from June and 2.5% lower than July 2025. IMSS clarified that employer registrations do not correspond directly to the number of active businesses, so the decrease does not necessarily indicate a wave of closures, though it does suggest a smaller base of formal registrants supporting overall job growth.

Digital platform work continued to stand out against the broader slowdown. Platform-linked positions rose by 10,273 in July, a monthly increase of 4.3%, reaching 247,900 jobs. The figure marks one year since digital platform workers began incorporating into IMSS coverage, a period in which platform positions grew by 115,059, or 86.6%. A total of 1,591,030 people have benefited from the reform overall, although only those exceeding the monthly net income threshold set under the Federal Labor Law were registered as positions with access to the full range of IMSS insurance, since platform workers became eligible for their first profit-sharing payment earlier in 2026. IMSS also reported 59,414 positions linked to domestic workers and 437,522 tied to independent workers, reflecting the institute's broader push to formalize categories of labor historically left outside the social security system.

Even so, IMSS affiliation captures only part of Mexico's labor market. More than half of the country's employed population continues to work informally, a structural gap that recent labor force survey data has shown is widening even as headline employment figures set records. That divergence between formal job creation and informal employment growth is likely to remain a central theme for companies assessing labor costs, workforce planning, and compliance risk in Mexico through the remainder of 2026, particularly as authorities prepare a broader reform to the Social Security Law intended to consolidate the rules introduced during the digital platform worker pilot program.

For businesses operating in Mexico, the July figures underscore a labor market that remains large and historically well-paid, yet increasingly sensitive to seasonal swings and sector-specific pressures. Companies in transportation, logistics, and platform-based services are positioned to benefit from the strongest hiring momentum, while manufacturers and agricultural producers face a more challenging outlook heading into the second half of the year. With wage growth outpacing inflation and formal affiliation still near record territory, the underlying resilience of Mexico's social security system appears intact, even as monthly volatility complicates near-term hiring forecasts for employers across sectors.