MexECON Blog

August Retail Sales Rise 0.6 Percent

Mexican retail sales rose in August by a seasonally-adjusted 0.6%, after revised gains of 0.8% in July and 1.6% in June.  On an unadjusted, constant-price basis, sales in August were up 4.4% from the same month one year earlier.  According to the report, the retail subsectors posting year-over-year sales increases in August were online and catalogs; food, beverages, and tobacco; recreational, paper, and personal products; clothing, footwear, and textile goods; home décor, domestic appliances, and computers; department stores; and motor vehicles, fuels, and lubricants.  The only retail subsectors to post year-over-year sales declines were metal and glass products and healthcare.

At the wholesale level, sales fell 0.2% in August, after a rise of 1.3% in July.  Sales at the wholesale level were down 1.0% year-over-year.

The report was released today by INEGI, the official statistics agency.

Comment:  With the August report, INEGI has revamped its methodology for computing retail and wholesale activity, putting into place a survey-based system designed to better capture receipts and other data in the commercial sector.  INEGI has also shifted the base year to 2008 from 2003.  The new methodology seems to be kicking out figures that are roughly similar to the previously reported data for retail and wholesale sales.  Perhaps the key thing to note is that retail sales have now posted their best three-month performance since early 2013.  Along with the modest rebound in consumer confidence since the beginning of the year, that suggests consumers are continuing to adjust to the new sales taxes that took effect in January and to the recent rebound in inflation.  Just as important, the recent acceleration in Mexican exports, manufacturing activity, and construction may be prompting stronger hiring.  Unemployment seems to be on a gradual downtrend again, and if it falls further, retail demand could keep rising and overall economic growth could get a boost.

Patrick Fearon, CFA
Vice President, Fund Management

Retail Sales 1408

Wholesale Sales 1408

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