MexECON Blog

October Retail Sales Fall 1.0 Percent

Mexican retail sales fell by a seasonally-adjusted 1.0% in October, after increases of 1.0% in September and 1.1% in August.  Without seasonal adjustments, but stripping out price changes, sales in October were up a healthy 3.5% from the same month one year earlier.  The retail subsectors posting the best year-over-year increases in October were those associated with interior décor goods, domestic appliances, and computers; motor vehicles, fuels, and lubricants; healthcare; metal and glass products; clothing and footwear; and recreational, paper, and personal products.  The only retail subsectors posting year-over-year sales declines were department stores and establishments selling food and beverages.  The report was released today by INEGI, the official statistics agency.

Comment:  Mexican retail sales are still trending upward, in spite of the decline in October.  The main reason for the rise is that unemployment in Mexico is continuing to fall gradually, and consumer optimism is on the upswing.  High food prices have weighed on food and beverage purchases, but recent data suggests the price hikes may be starting to dissipate.  The main risks to Mexico's retail sector come from abroad:  The country's labor market would probably soften considerably if U.S. demand withers or the European debt crisis spawns another global financial scare.  Nevertheless, the most likely scenario in the near term is that Mexican consumer spending and economic growth will continue to trend upward.

Patrick Fearon, CFA
Vice President, Fund Management

                                                 Mexican Retail Sales
                                        Seasonally Adjusted, 2003 = 100
                                                      Source:  INEGI
Retail Sales 1210

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