Formal job creation increased in September by an annual rate of 1.9%, according to figures from the IMSS (Instituto Mexicano del Seguro Social — Mexican Institute of Social Security), which reverses the trend of slowdown in job creation observed over the year; although this is positive, it is only 0.1 pp higher than growth in August. In this context of negative trend in investment and low dynamism of economic activity, job creation levels are expected to continue to grow relatively slowly in the remainder of the year. This growth saw registered formal employment reach 20.5 million insured workers. It should be noted that this increase was achieved as a result of permanent employment maintaining a similar level of growth (2.1% YoY) to the previous month, and of temporary employment growth recovering, with positive growth of 0.5% YoY.

September saw the best performance in job creation so far this year, with the volume of employment generated compensating for the loss of more than 378,000 jobs in December 2018. There is, however, still a 37% deficit in job creation — 488,000 jobs have been created this year, whereas 774,000 were created from January to September 2018. It is worth highlighting that there is a deficit in job creation with respect to both permanent and temporary jobs, but that the problem is more acute in the case of temporary employment, for which the deficit is 58%, compared to 31.1% for permanent employment.

The average daily wage for insured individuals affiliated to the IMSS was 374.5 pesos, which in real terms represented growth of 3.4% YoY. Consequently, the total wage bill grew by 5.5% YoY in September, maintaining an average growth of 5% over the last six months. As noted above, this growth of the total wage bill continues to be boosted by good performance in terms of inflation throughout the year and, according to BBVA Research forecasts, inflation will be under 3% at year-end.

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This document was prepared by Banco Bilbao Vizcaya Argentaria’s (BBVA) Research Department on behalf of itself and its affiliated companies (each a BBVA Group Company) for distribution in the United States and the rest of the world and is provided for information purposes only. The information, opinions, estimates and forecasts contained herein refer to that specific date and are subject to changes without notice due to market fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources believed to be correct by the Company concerning their accuracy, completeness, and/or correctness. This document is not an offer to sell or a solicitation to acquire or dispose of an interest in securities.

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