MexECON Blog

April Retail Sales Jump 0.9 Percent

Mexico's April retail sales jumped by a seasonally-adjusted 0.9%, easily erasing the revised 0.4% decline in March and marking the strongest monthly increase since last November.  Without seasonal adjustments, but stripping out the impact of price changes, sales in April were up 2.5% from the same month one year earlier.  The retail subsectors posting the best year-over-year increases in April were metal and glass products; textiles, clothing, and footwear; department stores; domestic appliances and computers; healthcare; and automobiles, fuels, and lubricants.  The only retail subsectors to post year-over-year declines were paper and personal products and food and beverages.  The report was released today by INEGI, the official statistics agency.

Comment:  The rebound in retail sales in April was consistent with the recent acceleration in Mexican exports and industrial production.  Those trends have helped keep unemployment on a gradual downtrend, and in response, consumer optimism has continued to rise.  The recent worsening of the European debt crisis and news of softer economic growth in the United States may reverse some of the gains in retail sales during the summer.  If those problems get significantly worse, Mexican economic prospects could darken considerably.  For the moment, however, the most likely scenario is that consumer spending will remain on an uptrend despite temporary pullbacks.

Patrick Fearon, CFA
Vice President, Fund Management

                                                   Mexican Retail Sales
                                       Seasonally Adjusted, 2003 = 100
                                                       Source:  INEGI
Retail Sales 1204

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