Mexico’s unemployment rate dropped to its lowest level in nearly a year in February, according to data published by the national statistics agency INEGI. The unemployment rate stood at 2.45%, down from 2.85% in January, marking the lowest rate since March 2023. The economically active population (PEA), constituting individuals either working or seeking employment, consisted of approximately 60.9 million people, among whom 1.49 million were unemployed. The data also revealed gender disparities in unemployment figures, with women experiencing a higher unemployment rate of 3.1%, compared to 2.4% for men.

The overall decline in the unemployment rate, however, doesn’t axiomatically equate to an increase in formal sector employment. The informal sector, characterized by non-taxable income and lack of access to benefits such as healthcare and paid holidays, saw a significant increase in employment. About 32.4 million Mexicans found jobs in this sector in February, comprising 54.5% of the entire workforce. INEGI also reported underemployment figures, with 3.8 million workers expressing the desire or need to work additional hours. The manufacturing sector saw a surge in employment, while the agricultural and construction sectors experienced job losses.

Economic analysts suggest that the trend of falling unemployment rates could possibly continue into the first half of 2024, bolstered by temporary work opportunities created in the wake of upcoming elections. Nonetheless, the challenge of transitioning workers from the informal to the formal sector remains a significant issue for the Mexican labor market.