MexECON Blog

October Retail Sales Fall 0.1 Percent

Mexico's October retail sales edged down by a seasonally-adjusted 0.1%, marking their first decline since May.  However, the slight fall erased only a portion of the 1.0% gain in September.  Without seasonal adjustments, but stripping out the effect of price increases, October's sales were up 3.0% from the same month one year earlier.  The retail subsectors posting year-over-year sales gains in October included paper and personal products; department stores; healthcare; metal and glass products; motor vehicles, fuels, and lubricants; textiles, clothing, and footwear; and food and beverages.  The only subsector to post a decline in sales was domestic appliances, computers, and interior decorating goods.  The report was released by INEGI, the official statistics agency.

Comment:  The slight correction in retail sales during October is consistent with that month's retreat in consumer confidence.  Despite the decline, consumer demand in Mexico still appears to have some momentum.  Aided by the big fall in unemployment during October and the recent improvement in the world's financial markets, optimism is likely to rebound and push retail demand higher again in the coming months.  Mexico continues to face important risks from global financial turbulence and slowing growth in Europe and Asia, but growth in the U.S. economy and the continuing momentum in Mexico's domestic demand are likely to keep the economy on an upward trend.

Patrick Fearon, CFA
Vice President, Fund Management

                                                   Mexican Retail Sales
                                        Seasonally Adjusted, 2003 = 100
                                                       Source:  INEGI
Retail Sales 1110

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