Economics: November economic news devoid of signs Mexico might see an upturn anytime soon
Gross fixed investment and private consumption figures through August remain a major obstacle to any chance of an economic rebound through early 2026. At the same time, industrial activity remains on the skids, while 3Q GDP slipped two basis points. Weakness also remains apparent in services consumption given that so far this year, the service industries dependent on household spending remain stagnant, some even with negative rates.
Inflation continues to climb even as monetary officials appear determined to further tighten the monetary policy rate spread squeeze. This creates a tough scenario as Mexican officials and businesses brace for what is shaping up to be a difficult year of trade talks and tensions, with the USMCA scheduled for review.
The labor market also shows a negative picture, in which the job growth taking place is confined to the informal economy. But that has been enough to keep a lid on the country’s low unemployment rate.
In indicators released just this past week, September retail sales continued to slow (2.5% yoy) and were flat compared to the previous month. But wholesale trade has been recovering in the last three months, following a string of consecutive contractions dating back to mid-2024. The country continued to improve its trade balance in October with a surplus that pared the cumulative deficit to a mere 12% of 2024 levels thanks to a robust showing year to date from the non petroleum column. That came despite US barriers pushing agricultural exports sharply lower and US tariffs sharply curbing shipments from the automotive and steel industries. However, imports of capital goods were once again down (-8.6% YTD) as both public and private investment has been falling.
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