MexECON Blog

June Retail Sales Rise 0.7 Percent

In a report earlier this week, Mexico's June retail sales rose by a seasonally-adjusted 0.7%, erasing much of the revised decline of 1.2% in May.  Without seasonal adjustments, but stripping out the impact of price increases, sales in June were up a healthy 4.8% from the same month one year earlier.  According to the report, from the official statistics agency INEGI, five of the nine retail subsectors posted year-over-year gains in June.  The subsectors posting increases included motor vehicles, fuels, and lubricants; clothing and footwear; healthcare; department stores; and metal and glass products.

Comment:  Mexican retail sales remain choppy, with every month of gain followed by a month of decline for the last three quarters.  Besides the sales gain in June, the best thing about this report was that the revised decline of 1.2% in May was considerably less than the original estimate of a 2.1% decline.  It is clear that rising unemployment during the spring hurt retail sales in Mexico.  In addition, rising fuel and food costs probably forced many consumers to pull back on purchases.  Nevertheless, the impact of these problems was apparently less than originally thought.  Incoming data from Mexico suggests the economy is weathering the challenges of the spring, so retail sales could well continue to rise in a choppy fashion in the near term.

Patrick Fearon, CFA
Vice President, Fund Management

                                        Mexican Retail Sales
                             Seasonally Adjusted, 2003 = 100
                                            Source:  INEGI
Retail Sales 1106

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