MexECON Blog

November Retail Sales Rise 2.4 Percent YOY

Mexican retail sales fell in November by a seasonally-adjusted 0.5%, erasing all of their revised increase of 0.3% in October.  Mexican retail sales have now fallen in two of the last three months.  Without seasonal adjustments, but stripping out the impact of price increases, sales in November were up just 2.4% from the same month one year earlier, significantly slower than the year-over-year gains of more than 4.0% in each of the previous three months.  According to the report, from the official statistics agency INEGI, the subsectors posting year-over-year sales increases in November were motor vehicles, fuels, and lubricants; food and beverages; textiles and clothing accessories; domestic appliances; computers; interior décor; and metal and glass products.

Comment:  The modest softening in retail sales during November does not change the fact that consumer spending in Mexico finally appears to be on a sustained upward trend.  This data series can be choppy.  In addition, a modest rebound in unemployment during the autumn and an associated pullback in consumer confidence could help explain the soft spot in sales.  The good thing is that unemployment fell at the end of 2010, and other recent indicators suggest the Mexican economic recovery is set to continue and even broaden in the coming months.  As long as Mexico's economic rebound continues, the picture for retail sales should continue to brighten.

Patrick Fearon, CFA
Vice President, Fund Management

                                      Mexican Retail Sales
                           Seasonally Adjusted, 2003 = 100
                                          Source:  INEGI
Retail Sales 1011

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