The Associated Press

CHICAGO - Marilu Vargas digs through bargain meats at a Mexican grocery store, trying to slash the budget for her family of seven while considering how much she can spare for relatives back home in Mexico.
Nine months ago, the 36-year-old lost her job at a mortgage company that folded in the dismal housing market. Drastic cutbacks have followed as her family struggles to live on her husband's $30,000 salary.
Vargas' parents and other relatives await whatever stipend she can afford to send from the United States. But lately they have been waiting longer for less.
As the U.S. recession deepens, Vargas is among a wave of immigrants who have cut back on what they send home - resulting in what's expected to be the first annual decline in so-called "remittances" to Mexico since the country's central bank began keeping track of payments 13 years ago.
Money sent from immigrants working in the U.S. is Mexico's second-largest source of foreign income after oil.
But that funding source dropped 2.2 percent in the first half of 2008, according to a report from the central bank. One of Mexico's largest banks said this month that it expects an overall 2 percent decline, to $23.5 billion, when the final 2008 numbers are reported Jan. 28.
Associated Press reporters in Chicago and Mexico spent time with Vargas and her relatives back home to uncover the everyday struggles behind those statistics.
The thousands of dollars Vargas has sent to Iguala, Mexico, during the last 17 years have allowed her parents to finish building their three-bedroom house and her mother to see a private doctor instead of going to one of Mexico's overcrowded and often inept public clinics.
Vargas remembers a time when she could send up to $500 a month. Lately, it's just $50 to $80 here and there.
Her mother never complains. "She accepts it," Vargas said. "She watches television and sees how difficult the situation is."
But it weighs on Vargas, who knows times are tough in Mexico as well.
"The U.S. economy is affecting them there," she said. "Life is more difficult."
Mango, orange and other fruit trees grow in abundance in the lush mountain city of Iguala, but people struggle to make ends meet.
Vargas' father, Alberto Rodriguez, 56, has not been able to find a job in more than two months.
The construction worker used to have steady work in the city, where rebar protrudes from the tops of cinderblock homes that are built in stages as money arrives from family members in the U.S.
But clinking hammers and cement-mixing machines have gone silent. Half-built structures loom as victims of a faltering economy, rather than works in progress.
Long lines of families waiting to pick up remittances at Western Union have all but disappeared.
"The migrants used to send back money to their families, who would hire someone to build a second floor or paint their houses," Rodriguez said. "But now everyone over there is losing their jobs and down here the jobs are disappearing as a result."