Mexican retail sales likely grew near-trend pace in January

Mexico's December retail sales (2.4% yoy) grew at nearly the same pace as the trend of the past 12 months (2.7%). 

While retail sales growth in H2 14 was stronger than in H1, the slow pace of sales growth in November and December casts doubt on the likelihood of strong sales and consumption growth in the near term. 

Societe Generale notes its forecasts as follows...

• We expect retail sales to have grown by 3.0% yoy in January, which is consistent with a modest growth in consumption of between 2.5% and 3.0% in Q1. 
  
  
• The key to stronger growth in consumption remains further improvement in the labour market. While it does seem to be improving, it is still operating below full-employment level, and wage growth and consumer confidence have yet to rise meaningfully. 
  
  
• As a result, it is likely that consumption will take time to improve substantially. A stronger contribution togrowth from consumption will have to wait until H2 15.