MexECON Blog

June Retail Sales Jump 1.1 Percent

Mexican retail sales jumped by a seasonally-adjusted 1.1% in June, after a 0.2% advance during May and a 0.3% decline in April.  On an unadjusted, constant-price basis, sales in June were up a strong 5.4% from the same month one year earlier.  The retail subsectors posting the best year-over-year sales gains in June were on-line and catalogs; healthcare; and metal and glass products.

At the wholesale level, June sales edged down 0.2%, after revised gains of 1.0% or better in each of the previous four months.  Wholesale receipts in June were up 11.8% year-over-year.

The report was released late last week by INEGI, the official statistics agency.

Comment:  Consumption spending in Mexico continues to get a boost from the steep drop in unemployment over the last year.  For consumers who rely on money sent back home by family members working in the United States, the on-going appreciation of the greenback also means that every dollar they receive gives them many more pesos than just one year ago.  The uptrend in Mexican wholesale sales is a clear sign that even retailers have become more confident that consumer demand will remain strong.  (Otherwise, they would be reluctant to order more goods from their suppliers, out of fear of being stuck with excess inventories.)  The strength in retail and wholesale trade should help keep the overall economy growing moderately in the near term, though there is still some downside risk from the current volatility in global financial markets and a possible hike in U.S. interest rates later this year.

Patrick Fearon, CFA
Portfolio Manager

Wholesale Sales 1506

Retail Sales 1506

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