MexECON Blog

October Retail Sales Rise 4.4 Percent YOY

Mexican retail sales rose a seasonally-adjusted 0.7% in October, after revised increases of 0.1% in September and 0.8% in August.  Retail sales in Mexico have now risen for four straight months, marking their best string of increases in several years.  Without seasonal adjustments, but stripping out the impact of price increases, sales in October were up 4.4% from the same month one year earlier.  According to the report, from the official statistics agency INEGI, the increase over the last year came from higher sales in a range of categories, including food and beverages, home appliances, metal and glass products, autos and auto fuels, and others.  The only categories with declining sales over the last year were healthcare goods and paper products.

Comment:  The fourth straight increase in retail sales is added confirmation that consumer spending in Mexico is finally on a sustained rise.  The momentum in retail sales is consistent with increased consumer confidence in Mexico, though a rebound in unemployment during the autumn raises the caution flag.  If consumer spending continues to rise, and especially if it accelerates, it would help broaden the current economic recovery in Mexico, which to date has relied almost exclusively on rising exports.  For the recovery to become truly self-sustaining, investment probably also needs to start rising again.

Patrick Fearon, CFA
Vice President, Fund Management

                                     Mexican Retail Sales
                           Seasonally Adjusted, 2003 = 100
                                          Source:  INEGI
Retail Sales 1010

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