Mexico | Lower spending on goods and services in July; consumption fell (-)1.4% MaM

By components, spending on goods fell (-)1.4%, while spending on services fell (-)1.0%; the slowdown in retail sales is consistent with the lower dynamism that formal employment has shown in recent months, given the deceleration in the industrial sector

Key points

• Key points:
• Within goods consumption, spending on food fell (-)1.8%, the lowest figure since April, while spending on health care goods reported a contraction of (-)3.2% during the period (the biggest drop since July 23).
• Regarding the services component, spending in hotels and restaurants registered contractions after two months of positive variations; consumption in restaurants fell (-)4.7%, while spending in hotels reported a monthly variation of (-)2.4%.
• We estimate the lower growth in formal employment will extend into the following months, given the loss of dynamism in the industrial sector, amid the slowdown in external demand for durable goods, and less spending on construction.
• The preliminary data on GDP growth for 2Q24 (0.2% QoQ) confirms the weakness of the economy (1.5% YoY for 1H24) and corroborates our downward bias to the 2024 GDP growth estimate (which could approach the growth that the production has shown in the first half of the year).

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