Overview of Mexican Private Consumption Trends
According to the Indicador Oportuno del Consumo Privado (IOCP) published by Mexico’s National Institute of Statistics and Geography (Inegi), private consumption in Mexico remained virtually unchanged during April and May compared to March levels. However, annual comparisons show a six-month decline in consumption.
Monthly Performance
- April saw a marginal monthly increase of 0.1% in private consumption.
- May experienced no change in consumption compared to the previous month.
Annual Comparison and Context
In contrast to the monthly performance, annual comparisons reveal a downward trend in private consumption. Specifically, there were decreases of 0.8% in April and 0.5% in May compared to the same months in the previous year.
If these trends continue, private consumption will have experienced six consecutive months of annual declines by early July. The IOCP is an experimental statistic provided by Inegi, offering an early, albeit less precise, estimate of the Indicador Mensual del Consumo Privado (IMCP), which is released approximately nine weeks after the reference month.
Fragile Fundamentals
Inegi data indicates that the deseasonalized consumer confidence index decreased by 0.6 points to 45.3 in April, marking the sixth consecutive monthly decline and reaching its lowest point since December 2022.
During April, formal employment decreased, negatively impacting net formal job creation of 84,857 compared to April 2023. However, the shorter workweek due to Easter celebrations in April 2024 partially offset this decline.
In reality, job creation in comparable April months was the lowest since 2009.
Key Questions and Answers
- What is the IOCP? The Indicador Oportuno del Consumo Privado (IOCP) is an experimental statistic provided by Mexico’s National Institute of Statistics and Geography (Inegi) that offers an early, albeit less precise, estimate of the Indicador Mensual del Consumo Privado (IMCP).
- Why is the consumer confidence index important? The deseasonalized consumer confidence index reflects consumers’ perceptions of the economy’s current and future state. A declining index may indicate reduced consumer spending, which can impact overall economic growth.
- What factors contribute to the decrease in formal employment? Factors such as economic uncertainty, changes in consumer behavior, and structural issues within industries can lead to decreased formal job creation.
