Economics: Confusion over Poverty Statistics
The National Statistics Institute (Inegi) published on Friday, July 15, the results of its Module of Socio-economic Conditions (MCS) for 2015, the study in which the agency measures information that allows the National Council for the Evaluation of Social Development Policy (Coneval) to calculate multidimensional poverty and household incomes.
On this occasion, Inegi made changes to the way it surveys household incomes, and although the survey questions remained the same and the sampling method was unchanged, operational changes were made to the manner in which the survey was conducted, with an eye toward arriving at a more accurate reading of the incomes of the poorest people.
The changes came in response to the institute’s concern that family incomes had been consistently under-reported in household surveys. Now, using the new methodology, the survey will show that there are fewer people living in poverty and that the income of the lowest decile is higher than had been previously reported.
The report provoked a strong reaction from the National Council for the Evaluation of Social Development Policy (Coneval), which is charged with measuring poverty, questioning the changes and the fact that they had not been properly notified about them.
In this week’s Outlook section, we describe INEGI´s arguments in favor of the change of methodology and the possible implications for gauging poverty.
In other economic news last week, the 12-month rate of inflation concluded the first half of July at 2.72%, the lowest reading for that period since officials began reporting consumer price data on a fortnightly basis (1989). The main factor contributing to the relatively benign reading was a moderation of the non-core component (1.86% yoy), which, in turn, was influenced by reductions in energy prices (-0.49% yoy) and a slight rise in the prices of livestock products (0.65% yoy, a considerably tamer rate than the 6.45% increase recorded for the first two weeks of July 2015). Core inflation, however, experienced an important increase (2.99%), although the impact was partially offset by the slower pace of growth in non core prices.
We at GEA expect inflation to trend higher in the coming months, at 12-month rates close to 3.0%, as the most volatile items, such as fruits and vegetables, are likely to continue to climb owing to the toll that heavy rains can take on crops. We also expect the impact on inflation of seasonal discounted electric power rates will dissipate going forward.
The authorities also reported last week that the number of people employed in manufacturing enterprises grew at a seasonally adjusted 12-month rate of 2.7% in May, a result exactly in line with GEA’s estimate, and one that fell short of the 3.1% increase reported for the same month of 2015. The softer increase reflects the extent to which the pace of growth in factory output and manufacturing exports slowed in recent months, thereby encouraging factory managers to slow hiring.
Manufacturing remunerations grew at a 12-month rate of 2.2% in May according to seasonally adjusted data, the second strongest increase registered since the authorities began publishing that specific indicator (January of 2008).
Now read on...
Register to sample a report