MexECON Blog

July Consumer Confidence Rises

In a report on Thursday, Mexico's July consumer confidence index rose by a seasonally-adjusted 1.9%, after revised increases of 1.8% in June and 1.5% in May.  According to the report, from the official statistics agency INEGI, the rise in optimism during July was broad-based, with increases in all five subindexes.  The best performance came in the subindex on consumers' willingness to buy durable goods.  That subindex jumped 6.8%, accelerating from a gain of 2.6% in June and marking its biggest jump since January.  The subindex on consumers' view of the current situation of the country as a whole rose 1.6%, accelerating from a rise of 1.2% in the previous month.  The other three subindexes also gained, though at a slower pace than in June.

Comment:  The third straight rise in optimism is a welcome sign that domestic demand in Mexico could help the country weather the global economic slowdown.  The rise in confidence is especially impressive given that Mexican unemployment has surged in recent months.  Nevertheless, the global slowdown has been dramatic, and in response, Mexican economic performance is still likely to soften in the coming months.  As evidence of that, it is notable that the subindexes in the confidence report that slowed the most were those on consumers' future expectations for their own families and for the country as a whole. 

Patrick Fearon, CFA
Vice President, Fund Management

                               Mexican Consumer Confidence
                       Seasonally-Adjusted, January 2003 = 100
                                           Source:  INEGI
Consumer Confidence 1107

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