MexECON Blog

July Consumer Confidence Rebounds

In a report last Friday, Mexico's July consumer confidence index rose by a seasonally-adjusted 1.2%, reversing the revised 1.1% decline in June.  According to the report, from the official statistics agency INEGI, the rebound in July came as every subindex improved over its June performance.  The subindex on consumers' willingness to buy durable goods jumped 1.8%, reversing part of its 8.1% plunge in the previous month.  The subindex on consumers' future expectations for their own family rose 1.9%, erasing all of its 1.1% fall in June.  The subindex on consumers' future expectations for the country as a whole jumped 1.7% in July, after declining 0.9% in the previous month.  The subindexes on consumers' views of the current situation for their own family and for the country as a whole both rose strongly for a second straight month.

Comment:  As I mentioned in my write-up of the confidence report last month, the decline in optimism during June could have reflected wariness ahead of the country's July 1 presidential elections.  The rebound in optimism during July suggests the previous month's decline was just a temporary setback against a backdrop of strong economic growth.  Mexican consumers are right to be concerned about negative developments abroad, especially the European debt crisis and the U.S. economic slowdown.  For the moment, however, consumers' spirits should be buoyed by their country's rising exports, increased hiring, and tame inflation. 

Patrick Fearon, CFA
Vice President, Fund Management

                                                      Mexican Consumer Confidence
                                             Seasonally Adjusted, January 2003 = 100
                                                                  Source:  INEGI
Consumer Confidence 1207

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