Mexico’s Jobs Miracle: Booming Headlines, Fragile Reality

Mexico’s job numbers look stunning at first glance. In October, about 655,500 more people were working, and the official unemployment rate slipped to 2.6%. Out of a labour force of roughly 62.5 million people, around 60.9 million now have a job.

On paper, it sounds like a nearshoring fairy tale. Look a little closer, and the picture changes. According to Mexico’s main labour survey, every net job created in October was informal. Informal means no social security, no written contract, very weak legal protection.

In one month, informal work grew by about 831,860 people, while formal employment actually fell by roughly 176,349. The informality rate jumped to 55.7% of all workers, up from 54.1% a year earlier and at its highest level in about three years.

At the same time, social-security records from IMSS tell a happier story. Companies registered 198,454 new formal jobs in October, pushing the total to around 22.64 million and about 1.8% formal job growth so far in 2025.

The strongest hiring is in manufacturing, construction, commerce and transport, especially in nearshoring hubs like Nuevo León, Jalisco and Chihuahua. Officials proudly post charts of “record employment” on social media.

Both stories can be true. The survey covers the whole economy, including people working off the books or in the public sector. IMSS only counts workers formally registered for social security.

What the combined data suggest is a shift inside the labour market: more Mexicans drifting into self-employment, unpaid family work and “subemployment” – people who have a job, but not enough hours or income.

Subemployment rose to about 7.5% of workers in October and generated more than 30% of that month’s employment growth. Over the first nine months of 2025, between 55% and 56% of Mexican workers have been informal.

More than 2 million people joined the workforce through informal jobs, while almost half a million formal posts disappeared on a net basis. For expats, investors and foreign businesses, the message is simple.

Mexico talks about competitiveness, nearshoring and opportunity. But without clear rules, lighter red tape and real rewards for formal work, the country risks building its “jobs miracle” on sand rather than on solid ground.

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