Mexican retail sales fall unexpectedly in December

Retail sales in Mexico were much weaker than expected at the end of 2015, but at least one top broker continued to hold out hope that the North American country´s economy would be able to weather the ongoing recession in its manufacturing sector.

Mexican retail sales dropped at a 1.4% month-on-month pace in December, well below economists´ expectation for an unchanged reading, driven by falls in sales of domestic equipment, paper and entertainment, cars and food among other components.

In comparison to a year ago, retail sales rose by 3.4%.

There was now a risk that a proxy for the rate of growth in GDP for December, set for release on 23 February, might come in weaker than expected, Barclays´s Marco Oviedo said in a research note sent to clients.

However, Oviedo still expected GDP to expand at a 0.5% quarter-on-quarter clip.

"We expect consumption to remain strong at the beginning of the year, allowing the economy to expand modestly amid the recession in the industrial sector," he said.

The economist pointed to data showing a 0.4% rise in employment in January and a 0.4% gain in ANTAD same-store sales to back up his case.