Mexico: Consumer confidence falls further in August
September 6, 2016
Confidence among Mexican households worsened in August, reflecting a broad-based deterioration in economic sentiment. The unadjusted index of consumer confidence produced by INEGI fell from 88.9 in July to 86.5 in August. The result undershot the 87.5 the markets had expected and marks the lowest confidence since early 2014, when consumer sentiment was hit by tax increases. The seasonally-adjusted indicator decreased for a second consecutive month (August: -1.6% month-on-month; July: -1.9% mom), corroborating consumers gloomy mood.
The details were quite discouraging. Consumers’ opinions of the current national economic situation as well as of the country’s future conditions deteriorated markedly over the previous month, with the indices of these two subcategories plunging to record lows in August. Moreover, households’ expectations of their own economic situations decreased substantially, while their opinions of their current economic situations remained unchanged.
Although consumer fundamentals remain solid—employment, wages and credit all continue to grow—the strong deterioration in consumers’ perceptions of the national economic situation could be related to the widespread demonstrations by one the country’s largest teachers’ unions and the current weakness of the currency, which consumers tend to associate with a deterioration of the economic outlook.
Author: Ricardo Aceves, Senior Economist