Itaú BBA - MEXICO – Retail sales surprised to the upside in November

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MEXICO – Retail sales surprised to the upside in November

Janeiro 27, 2020

The real wage bill continues to expand at a solid pace

Retail sales was above market expectations in November. Retails sales expanded 2.1% year-over-year in November, above our forecast (1.1%) and market expectations as per Bloomberg of 0.4%. According to calendar-adjusted data, reported by the statistics institute (INEGI), retail sales grew at a similar pace (2.1% year-over-year in November, from 0.3% in October), taking the quarterly annual growth rate to 1.7% in November (practically unchanged from October).

At the margin, monthly retail sales expanded at a solid pace, but momentum remained soft. Using seasonally-adjusted figures, retail sales expanded at a strong pace in November (1.7% month-over-month, from -2.3% in October), but momentum remained soft as the quarter-over-quarter annualized rate (qoq/saar) stood at 1.2% in November (from 0.3% in October). The real wage bill, an important private consumption determinant, continues to expand at a solid pace (5.2% year-over-year in the quarter ended in November), despite the weakening of employment. Meanwhile, other private consumption determinants decelerated. In particular, nominal consumption credit from commercial banks stood at 5.6% year-over-year in November (from 5.9% in October), while remittances in pesos contracted 6.8% (from 4.2%). 

We expect private consumption expanded at a moderate pace in 2019 (relative to 2018). In this context, employment is weakening. 
 

Julio Ruiz



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