MexECON Blog

January Consumer Confidence Rises

In a report yesterday from INEGI, the official statistics agency, Mexico's January consumer confidence index rose by a seasonally-adjusted 1.1%.  The increase came after revised declines of 0.2% in December and 1.3% in November.  According to the report, the increase in optimism at the beginning of 2011 came primarily from an improvement in how consumers view the current situation of their own family and their willingness to buy durable goods.  Consumers reported a modest decline in their view of the entire country's current situation and their future expectations for their own family and for the country as a whole.

Comment:  The rebound in Mexican consumer confidence during January snapped a two-month string of declines - the first such string of declines since late 2009.  Because of a recent report showing unemployment retreated in December, the rise in optimism likely stems in large part from an improving job market.  In addition, recent reports have suggested the U.S. economy is starting to improve, and recent U.S. tax cuts set the stage for continued demand from north of the border for Mexican exports.  One of the most encouraging aspects of the January confidence report is the continued improvement in Mexican consumers' willingness to buy durable goods.  That is probably a signal that domestic demand in Mexico will keep strengthening.

Patrick Fearon, CFA
Vice President, Fund Management

                               Mexican Consumer Confidence
                        Seasonally Adjusted, January 2003 = 100
                                            Source:  INEGI
Consumer Confidence 1101

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