Mexico: Consumer confidence rises in May
Consumer sentiment rose in May, with the seasonally-adjusted index of consumer confidence produced by the Statistical Institute (INEGI) hitting a five-month high of 87.0 points from a revised 86.4 points in April (previously reported: 86.5). The print overshot market expectations of a dip to 85.5 points.
Out of the five components of the index, four contributed to the improvement in May. Consumers’ assessment of future economic conditions recorded the strongest gain. Softer improvements were registered in consumers’ view of their current and future household economic conditions, and of the current macroeconomic situation. Consumers were, however, less willing to purchase big-ticket items in the month.
Consumer confidence has been entrenched below 100 points for over 10 years. In recent months it has also been stubbornly below the long-term average, despite a tighter labor market and a pick-up in wage growth. Political uncertainty surrounding the 1 July general elections and the NAFTA renegotiations is likely weighing on what should otherwise be higher sentiment, given the overall improvement in consumer fundamentals.