Mexico added almost 1.1 million informal sector jobs in July but lost more than 400,000 formal sector positions, according to data published by the national statistics agency INEGI on Thursday.
Mexico’s informality rate — the percentage of the total Mexican workforce employed in the informal sector — thus rose from 55% in June to 56.2% in July, the highest level since December 2021.
INEGI’s data shows that the number of people in informal sector jobs rose by just over 1.08 million in July to reach 34.1 million.
Meanwhile, the number of people in formal sector jobs — i.e. workers with employment benefits such as paid vacations and IMSS health insurance — declined 412,889 in July. Around 26.6 million workers, or 43.8% of the Mexican workforce, are employed in the formal sector.
The increase in informal sector jobs in July and the decline in formal ones left Mexico with a net gain of 670,991 positions last month, the best result this year. The net gain in jobs came after two months of declines, but the fact that the growth was due to a surge in informal employment is cause for concern.
The high level of informality in Mexico has “a direct cost on potential economic growth,” Gabriela Siller, director of economic analysis at Banco Base, wrote on X on Thursday. She noted that 2024 data from INEGI showed that Mexico’s vast informal sector generated just 25.38% of Mexico’s GDP even though it employed — and continues to employ — more than half of all workers.
La tasa de informalidad en México se ubicó en 56.20% en julio y promedia 55.16% en lo que va de 2026, por arriba
del 54.87% de 2025 y del 54.27% de 2024.Esta precarización tiene un costo directo sobre el crecimiento económico potencial.
De acuerdo con la Medición de la…
— Gabriela Siller Pagaza (@GabySillerP) August 27, 2026
Mexico has lost more than 775,000 formal sector jobs this year
INEGI data shows that Mexico added a total of 377,764 jobs in the first seven months of 2026.
The overall job growth is the product of the addition of 1.15 million informal sector jobs and the loss of 776,501 formal sector positions.
Siller said that the INEGI data is indicative of an ongoing deterioration of Mexico’s formal sector labor market. That deterioration is “one of the factors keeping the country in an economic stagnation trap,” she wrote in a Banco Base analysis.
Mexico’s economy has struggled to grow in recent times, although it did expand 1.4% on a quarter-over-quarter basis between April and June, the best second-quarter result since 2021.
INEGI’s employment data in detail
INEGI reported on Thursday that a total of 60.75 million people were employed in Mexico in July, while 1.81 million people were classified as unemployed. Mexico’s unemployment rate in July was 2.9%, an increase of 0.1 points compared to the same month of 2025. The unemployment rate was 3.1% for women and 2.9% for men.
Of the 60.75 million people in jobs in July, around 63% were employed in the tertiary or services sector while about 25% worked in the secondary sector, which includes the manufacturing, construction, mining and electricity industries. Most of the remaining workers — about 10.6% — were employed in Mexico’s primary sector, which includes agriculture and fishing, among other activities.
The secondary sector added 504,390 jobs in the 12 months to the end of July, while the primary and tertiary sectors lost 279,339 jobs and 208,494 jobs, respectively. The net result was a loss of 45,352 jobs in Mexico in the 12 months to July 31.
The growth of the secondary sector workforce was primarily due to the addition of more than 522,000 construction jobs in the 12 months to the end of July. The manufacturing industry lost just over 61,000 jobs in the period, while the mining and electricity sectors added almost 43,000 positions.
INEGI also reported that 6.7% of Mexico’s 60.75 million workers were underemployed in July, meaning they weren’t working as many hours as they wanted. That figure was down 0.6 points compared to July 2025.
Most workers in Mexico earn between one and two times the minimum wage, meaning they take home 315-630 pesos (US $18.50-$37) per day.
INEGI reported that 27.88 million workers —45.9% of the workforce — earned “up to a minimum wage” in July. Just over 19.4 million workers earned more than one but no more than two minimum wages. That number equates to 32% of the Mexican workforce.
Less than 1% of Mexican workers earned more than 5 minimum wages (1,575 pesos or US $93 per day) in July, according to INEGI, while 5.7% made 2-3 minimum wages and 2.4% earned 3-5 minimum wages.
With reports from El Economista
