MexECON Blog

December Consumer Confidence Falls

Mexico's December consumer confidence index fell by a seasonally-adjusted 0.7%, after a 0.8% decline in November.  The decline in December came from lower readings in three of the five subindexes.  The subindex on consumers' future expectations for the country as a whole dropped 3.2%, erasing all of its 0.6% increase in November and posting its worst decline since late 2010.  The subindex on consumers' future expectations for their own family fell 1.4%, after a rise of 0.2% in the previous month.  The subindex on their view of the current situation in the country also fell 1.4%, after rising 0.2% in November.  On a more positive note, the subindex on consumers' view of the current situation for their own family rose 2.4%.  The strongest gain came in the subindex on consumers' willingness to buy durable goods.  That subindex jumped 12.6%, posting its best increase since at least 2008.  The report was released on Friday by INEGI, the official statistics agency.

Comment:  Although the overall confidence index fell for a second straight month in December, the details help clarify why Mexico's consumer spending has continued to rise.  The data suggest that even though Mexican consumers have become warier of the future (probably in large part because of disturbing trends in Europe and Asia), their current situation has improved markedly since the depths of the recession, to the point where they are more comfortable buying autos, home appliances, and other durable goods.  Unemployment continues to fall gradually, so if the external environment stabilizes, optimism could rebound and spending could firm even more.

Patrick Fearon, CFA
Vice President, Fund Management

                                        Mexican Consumer Confidence
                                 Seasonally Adjusted, January 2003 = 100
                                                     Source:  INEGI
Consumer Confidence 1112

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