MexECON Blog

August Retail Sales Rise 4.4 Percent YOY

In a report yesterday, Mexico's August retail sales rose by a seasonally-adjusted 0.7%, accelerating from an upwardly-revised increase of 0.6% in July.  According to the report, from the official statistics agency INEGI, the increase in August came from stronger sales in several different types of retail stores, including those dedicated to food and tobacco, textile products, home appliances, metal and glass products, and autos and auto fuels.  Without adjusting for seasonal variations, but stripping out the impact of price increases, overall sales in August were up 4.4% from the same month one year earlier.  The year-over-year gain was the strongest since a 5.0% increase in the year to May.

Comment:  Mexico's retail sales data can be volatile, but with the large upward to revision to the July data, it now looks like Mexican retail sales have posted their best back-to-back increases since late winter.  This provides some hope that Mexico's current economic rebound may be broadening beyond the export sector.  The main weak spot in Mexico's economy remains investment, where activity is being held back by uncertainty regarding the future path of the economy, a continuing credit crunch, and rising violence by drug cartels.

Patrick Fearon, CFA
Vice President, Fund Management

                                         Mexican Retail Sales
                               Seasonally Adjusted, 2003 = 100
                                              Source:  INEGI
Retail Sales 1008

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