On your marks, get set…
The April Monthly Index of Economic Activity (IMACEC) shows that the economic slowdown trend unfortunately continues. The weakness primarily stems from underperforming commerce and stagnant services. Nor is the manufacturing production index offering much reason to celebrate. Consumption continues to adjust to households' lower income and liquidity; investment remains subdued; and exports haven't been too impressive either. The trade balance report for May showed a monthly surplus, reducing vulnerability in terms of the current account deficit.
The labor market has continued to weaken. However, the unemployment rate increase has been relatively moderate, given the circumstances. Employment has managed to hold steady thanks to contributions from the public sector and informal jobs. Wages show a noteworthy upward trend y/y, after adjusting for inflation. Nevertheless, the CPI-deflated wage bill has been on a downward trajectory.
May CPI showed overall slightly faster inflation moderation than the Central Bank had considered in its baseline scenario. The main aspect to highlight in the May CPI results was again the divergence between total inflation and core measures. The CPI for personal services also softens the dovish interpretation of the May CPI. Another characteristic that persisted was the volatility and unpredictability of a few prices.
Now read on...
Register to sample a report