Mexico's October consumer confidence index jumped by a
seasonally-adjusted 2.9%. That was more than enough to erase
the revised declines of 1.4% in September and 0.6% in August, and
it marked the strongest increase since February 2011.
According to the report, from the official statistics agency INEGI,
all five subindexes posted good gains in October. The
subindex on consumers' view of the current situation in the country
as a whole surged 7.7%, after plunging 5.3% in September. The
subindex on consumers' future expectations for their own family
rose 2.0%, and the subindex on their future expectations for the
whole country rose 1.9%. The subindex on
consumers' view of the current situation for their own family
increased 1.5%. The key subindex on consumers' willingness to
buy durable goods rose 4.4%, though that was not enough to offset
the declines of 3.0% in September and 5.3% in August.
Comment: Mexican consumer
optimism has become fragile in the last several months, as the
positive impact of strong economic growth and falling unemployment
have been offset by the problem of accelerating inflation.
Recent data show inflation eased a bit in the first half of
October, and if the trend continued later in the month, it could
help explain the big rebound in confidence. Nevertheless,
inflation may need to keep moderating for optimism to
stay on an uptrend. If it does not, consumption demand in
Mexico could weaken considerably going forward.
Patrick Fearon, CFA
Vice President, Fund Management
Adjusted, January 2003 = 100