Mexico's January consumer confidence index jumped by a
seasonally-adjusted 2.6%, after revised declines of 0.5% in each of
the previous two months. The rise in January was the
strongest since September 2010. For a second straight month,
the increase stemmed mostly from a strong increase in the subindex
on consumers' willingness to buy durable goods. That subindex
surged 12.5%, almost matching the 13.0% rise in December. In
addition, there were increases of 2.5% or more for the subindexes
on consumers' views of the current situation in the country as a
whole, their future expectations for the country, and their future
expectations for their own family. The subindex on consumers'
view of the current situation of their own family was up 1.7% for
the month. The report was released on Friday by INEGI, the
official statistics agency.
Comment: Mexican unemployment
fell to 5.0% in December, and last week's purchasing
managers' report on manufacturing shows joblessness probably fell
again in January. This would go a long way toward explaining
the broad improvement in Mexican optimism last month. Other
factors are probably also helping buoy consumer attitudes.
Recent data show the U.S. economy is gaining strength, which bodes
well for Mexican exports, industrial production, and
employment. The improvement in the U.S. economy probably also
means Mexicans working north of the border are remitting more
of their earnings back to family members in Mexico. At the
same time, economic news out of Europe and Asia has improved,
easing fears of a renewed global crisis. If these trends
continue, as I expect, Mexican consumer confidence and consumption
demand will probably keep rebounding.
Patrick Fearon, CFA
Vice President, Fund Management
Mexican Consumer Confidence
Seasonally Adjusted, January 2003 = 100