econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 20 February 2016

Mexico Economy Slows In Fourth Quarter

from the Dallas Fed

- this post is authored by Jesus Canas

Mexico's economy grew in the fourth quarter, although at a slower pace than in the third. The government's monthly gross domestic product (GDP) measure increased in October and November. In addition, recent data on exports and industrial production show a decline. Inflation appears firmly under control despite the peso's depreciation against the dollar. The consensus forecast of 2016 GDP growth is 2.7 percent.

Output Growth Lags in October and November

Mexico's Global Economic Activity Index, the monthly proxy for GDP, grew 0.1 percent in November after increasing 0.2 percent in October; this was slower than the July-to-September average of 0.3 percent. Nevertheless, the three-month moving average shows steady gains since the end of 2013 (Chart 1). Service-related activities (including trade and transportation) ticked up 0.3 percent in November, while goods-producing industries (including manufacturing, construction and utilities) fell 0.5 percent. Agricultural output contracted 0.7 percent. The official estimate of fourth-quarter GDP will be released Feb. 23. Mexico GDP grew 2.5 percent (annualized) in the first nine months of 2015.

Exports Fall in November

Exports dropped 3.8 percent in November after growing 2.2 percent in October. The three-month moving average reveals a continued steep decline in oil exports and slowing total exports toward the end of the year (Chart 2). Oil exports were down 45 percent, while manufacturing exports were up 1.5 percent in the first 11 months of 2015 compared with the same period the prior year.

Industrial Production Posts Two Consecutive Months of Decline

Mexico's industrial production (IP) fell 0.5 percent in November after dropping 0.1 percent in October. Three-month moving averages show some slowing in total IP, which includes construction, oil and gas extraction, and utilities. Manufacturing IP continues to increase faster than total production (Chart 3). Meanwhile, U.S. IP has lost momentum and dipped 0.4 percent in December - its third consecutive drop.

Retail Sales Grow in November

Retail sales increased 0.5 percent in November after growing 0.3 percent in October. However, the three-month moving average shows some deceleration toward the end of the year (Chart 4). Year over year, retail sales were up 5.3 percent in November. Consumer confidence worsened in December.

Job Growth Slows in Fourth Quarter

Formal-sector employment - jobs with government benefits and pensions - rose at an annualized rate of 1.2 percent in December, considerably below trend growth (Chart 5). Employment grew 3.7 percent in 2015 (December over December).

Peso Loses Ground Against Dollar in January

The peso averaged 18.1 pesos per dollar in January, which is 5.6 percent lower than in December (Chart 6). The peso has lost 19 percent of its value against the dollar over the past year. The Mexican currency has been weak initially as a result of the anticipation of the increase in U.S. interest rates and recently due to market turmoil resulting from weaker-than-expected global demand and the possibility of pushing oil prices even lower, thus, the negative impact on Mexico's government finances. Oil revenues account for about one-third of the federal government budget.

Inflation Continues Below Official Target

Inflation dropped to 2.1 percent in December - its lowest level in recent history and below the central bank's long-term inflation target of 3 percent (Chart 7). Prices, excluding food and energy, rose 2.4 percent. Mexico's central bank increased the policy rate 25 basis points to 3.25 percent for the first time since August 2008, complying with its long-stated intent to match U.S. rate hikes in an effort to prevent any adverse effects on the peso, which could push up inflation.

About the Author

Cañas is a business economist in the Research Department at the Federal Reserve Bank of Dallas.

Source

http://www.dallasfed.org/research/update/mex/2016/1601.cfm

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Are You Feeling the Economic Surge?
Big Mess in Italy
News Blog
Big Mac Index In Its 30th Year
What We Read Today 03 December 2016
Scientists Find Giant Underground Ice Reserve On Mars
Sustained 3 To 4% GDP Growth Is A Huge Stretch
New Earthquake Risk Model Confirms Possibility Of Statewide Earthquake In California
Subprime Auto Debt Grows Despite Rising Delinquencies
Silver Sentiment Looks Golden
Infographic Of The Day: Investing In A Cure For Cancer
Early Headlines: Trump Campaigning Still, WaPo Finds Voter Fraud Favored Trump, No Carolina GOP Shotguns For Voter Fraud, New Age Of Blacklisting, All Eyes On Italy, Big Bucks In India And More
What Did The EU Ever Do For Europeans?
The 10 Most Stolen Cars In America
Improvements In US Air Pollution
Has The Fed Been Effective In Stimulating Consumption?
Investing Blog
Technical Thoughts: Manage Risk
Investing.com Weekly Wrap-Up 02 December 2016
Opinion Blog
Modern Slavery
Please, Donald Trump, Don't Send Climate Science Back To The Pre-Satellite Era
Precious Metals Blog
Silver Prices Rebounded Today: Where They Are Headed
Live Markets
02Dec2016 Market Close: WTI Crude Climbed Back Up To Previous 51 Handle, US Dollar Index Trading At The100 Level, Oil Rig Count At 10-Month High
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved