Economics: Another month of mixed economic indicators alongside easing inflation
Economic activity data for January and February delivered mixed results in the case of manufacturing and construction as have consumer and business confidence indicators, readings that reflect the extent of continuing momentum in some areas of the economy. At the same time, the country is faced with the need to navigate an uncertain environment at the global level going forward.
The monthly proxy index (IGAE) showed economic activity largely sustaining its fourth quarter pace of expansion in January as services activity sped up and industrial output slowed. Fixed capital formation sustained its uptrend in December in response to another significant jump in M&E expenditure and a considerable acceleration of an incipient recovery in construction investment. But while all three major categories of private spending grew for yet another month in December, the increases were the weakest in 20 months.
In economic news this past week, in February Mexico saw its trade performance weaken and the jobless rate fall significantly, despite major job cuts in the formal and farm sectors. And as inflation continued to slow, Banco de México appeared to be nearing the end of what has been a 23-month 725-basis point tightening cycle as monetary authorities expressed more optimism regarding the direction of prices and the resilience the economy has displayed.
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