MexECON Blog

June Retail Sales Rise 0.2 Percent

Mexican retail sales rose in June by a seasonally-adjusted 0.2%, after a revised flat performance in May.  Prior to that, sales had risen 1.2% in April and 1.3% in March.  On an unadjusted, constant-price basis, sales in June were up 1.1% from the same month one year earlier.  According to the report, the retail subsectors posting year-over-year sales increases in June were clothing, footwear, and textile goods; food, beverages, and tobacco; healthcare; and department stores.  The retail subsectors posting year-over-year declines were home décor, domestic appliances, and computers; recreational, paper, and personal products; metal and glass products; and motor vehicles, fuels, and lubricants.

At the wholesale level, sales plunged 3.9% during June, after a revised 1.5% drop in May.  Sales at the wholesale level were down 3.0% year-over-year.

Comment:  Mexican retail sales have been trending upward again in 2014, as consumers continue to adjust to the increased sales taxes that took effect in January.  In fact, it appears consumer spending was the top reason for the acceleration in overall economic growth in the second quarter.  As I have been warning, however, tepid hiring and relatively high unemployment will probably limit the gains going forward.  Note that retail activity in May and June was much less robust than it was earlier in the spring.  Moreover, the sharp decline in wholesale sales over the last two months may indicate that higher-level suppliers see signs of consumer softness in the coming months.  If consumer demand does cool, it will keep a lid on Mexican economic growth in the second half of 2014.

Patrick Fearon, CFA
Vice President, Fund Management

                                                   Mexican Retail Sales
                                           Seasonally Adjusted, 2003 = 100
                                                     Source:  INEGI
Retail Sales 1406

                                              Mexican Wholesale Sales
                                         Seasonally Adjusted, 2003 = 100
                                                      Source:  INEGI
Wholesale Sales 1406

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