


A few datapoints to keep on a post-it note as things progress; starting with a rather significant new release that I think you will find interesting.
Approximately 12.3 million Mexicans live abroad, both legally and illegally, with 97% of them living and working in the United States, according to BBVA Research. Last year Mexicans living abroad sent $64.75 billion back home in remittances, largely from Texas and California to states in central and western Mexico.
According to data just released, in April of this year remittances back to Mexico dropped 12.1%. The Mexico central bank said April saw 8.1% fewer transactions than a year earlier, that’s down to 12.4 million transactions. For Mexico this could be a devastating trend. [Sidenote: Remember, Trump is likely planning a complete overhaul of the USMCA later this year.]
MEXICO CITY (Reuters) -Remittances sent to Mexico slumped 12.1% in April compared to a year earlier, according to central bank data published on Monday, marking the steepest drop in over a decade as U.S. lawmakers mull a tax on such payments sent abroad.
The world’s second-largest recipient of remittances, Mexico receives these payments chiefly from migrants working in the neighboring United States. In April, Mexicans abroad sent fewer transactions and smaller payments, totaling $4.76 billion.
Analysts said the slump likely resulted from a broad crackdown on migration in the U.S. since President Donald Trump came to power in January, as authorities revoke some Biden-era protections and increase raids across the country.
The latest data marks the steepest year-on-year drop since September 2012, according to central bank data.
Banco Base economic analysis director Gabriela Siller said April’s drop was likely due to a weaker U.S. job market and migrants’ fear of losing their jobs or being deported.
“The April remittance data is terrible,” she said in a post on X, attributing the drop to “the deterioration of the labor market in the U.S. and U.S. migrants’ fear of going out to work and sending their remittances, for fear of being deported.” (read more)
The Mexican domestic economy benefits from these remittances as the money flow from the United States directly fuels family purchases and the economy within Mexico. If significantly less money is flowing to Mexico due to voluntary exit and deportation, the Mexico domestic economy contracts.
Now, a few things to consider.
♦ First, a question I have often asked myself. What happens to U.S. economic data, statistically recorded based on identifiable datapoints, if the unquantifiable underground economy is forcibly reduced? If black market (cash) wages are removed, and that creates structural employment pressure leading to traditional (non-cash) wage increases, will the BEA/BLS wage increase -or income data- seem skewed?
Perhaps, just perhaps, we are seeing the answer. Last month, again recording for April, the Bureau of Economic Analysis (BEA) reported that Personal income increased $210.1 billion (0.8 percent at a monthly rate). That’s a 9.6% annualized rate of potential wage increases. That is stunningly good.
♦ Second, Florida is now reporting the biggest decline in home prices in a decade. As reported in the New York Post, “the median price for all home types in Florida fell 1.7% in March from the same time last year, according to Redfin, a national real estate brokerage. That’s a small number with big implications.” … “Median prices for condos and co-ops fell about 7% in March.” In addition, available housing inventory is reaching record highs.
As the Hurricane season gets underway, right now in June 2025 things look a lot like June 2005. Florida was where the financial atom split in the housing crisis of ’07/08. The Florida housing values climaxed in December of 2005, then collapsed stunningly fast. However, the shockwave took until 2007 to reach nationwide impact. At least in the Florida housing market data, June 2025 looks an awful lot like June 2005.
There are a lot of factors influencing the Florida housing market, including declining in-migration, ridiculous insurance costs, high mortgage rates, high prices and now increases in unsold available inventory. However, when you overlay the potential slowdown in construction with a decline in available workers (repatriation), you get a slower overall economy to absorb that growing housing inventory.
Back to the main subject. If remittances to Mexico continue to shrink due to repatriation (voluntary and forced), the economy of Mexico could be squeezed significantly. This creates even more pressure on Mexico, and simultaneously more leverage for President Trump in a USMCA renegotiation.
It will be interesting to watch how all of this unfolds.