Stay informed with the latest insights on Mexico's economy via statistics and AI analysis and synthesis.
Updated: 2026-06-16
The price of gold increased following a recent agreement between Iran and the United States. This development has influenced market dynamics, prompting investors to reassess their positions in precious metals. The agreement is seen as a significant step in easing tensions between the two nations. — El Economista, 16 Jun 2026. Read more
The National Insurance and Bonding Commission (CNSF) has granted approval for the consolidation of assets to operate life insurance. This decision aims to enhance the financial stability and operational capacity of life insurance companies in Mexico. The CNSF emphasized the importance of this move for the insurance sector's growth and consumer protection. — El Economista, 16 Jun 2026. Read more
Wall Street experienced a positive reaction following the announcement of an agreement between the EU and Iran. The Nasdaq index surged by 3.07%, reflecting investor optimism. This development has contributed to a favorable market sentiment. — El Financiero, 15 Jun 2026. Read more
Wall Street ended the trading session with gains, driven primarily by strong performances from technology companies. Investors showed optimism as tech stocks led the market upward, reflecting positive sentiment in the sector. — El Economista, 15 Jun 2026. Read more
The Mexican peso has shown a slight increase against the dollar as markets await the signing of an agreement between the United States and Iran. This development is closely monitored by investors, reflecting potential impacts on economic relations and currency stability. — El Economista, 15 Jun 2026. Read more
The Mexican peso has shown signs of stabilization following a provisional agreement between the United States and Iran. This development has contributed to a calmer financial environment, alleviating some immediate pressures on the currency. Analysts suggest that the agreement may have positive implications for regional economic stability. — El Financiero, 15 Jun 2026. Read more
A recent peace agreement has positively impacted the Mexican peso, leading to its strengthening against the dollar. Concurrently, this development has resulted in a decline in oil prices, reflecting the market's response to the improved political stability in the region. — El Economista, 15 Jun 2026. Read more
The Mexican peso strengthened against the US dollar, benefiting from the possibility of a new agreement between the United States and Iran. The currency's performance reflects market reactions to geopolitical developments, highlighting the peso's responsiveness to international negotiations. — El Financiero, 12 Jun 2026. Read more
The article discusses the elevated levels of default in crowdfunding over the past three semesters. It highlights the challenges faced by investors and the implications for the crowdfunding sector. Specific figures or quotes regarding the default rates were not provided. — El Economista, 12 Jun 2026. Read more
Banco Nacional de Comercio Exterior is revising its operational strategy to enhance support for Mexican exporters. The bank aims to adapt to changing market conditions and improve financial services. President Claudia Sheinbaum emphasized the importance of strengthening international trade relations during the announcement. — Expansión, 12 Jun 2026. Read more
Tracking the U.S.-Mexico Talks in the USMCA Review — Google News, 15 Jun 2026. Read more
Dollar Remains Below 18 MXN: What Is the Exchange Rate Today, June 15, 2026? — Google News, 15 Jun 2026. Read more
El Jalapeño: Mexico prepares for USMCA renewal after Trump says he doesn’t want one — Google News, 14 Jun 2026. Read more
Ripple Targets US-Mexico Remittances With MXNB on XRP Ledger — Google News, 13 Jun 2026. Read more
Updated: 2026-05-09 by Alexander Dentler
Key Takeaways
Following the May 7, 2026 decision, Banxico's policy rate stands at 6.50%, reflecting a cut of 0.25% as part of a broader trend of easing monetary conditions. After Banxico's May 7 meeting, the target rate has been adjusted to 6.50%, representing a significant policy shift in light of persistent economic challenges. The recent cut adds to the previous reduction in March, indicating a broader trend towards easing as the central bank seeks to support economic stability amid rising uncertainty. With this latest decision, the cumulative change now reflects a total decline of 0.50% since March, signaling a responsive approach to current economic conditions.
The Fed's target rate currently sits at 3.62%, establishing a rate differential of 2.88% in favor of Mexico. Relative to the United States, Banxico's current policy stance reveals a significant gap of 2.88% between the two central banks. While the Fed has maintained its rate amidst ongoing economic assessments, Banxico's recent cuts indicate a more aggressive response to domestic pressures. This first-mover dynamic, where the Fed has consistently acted prior to Banxico, is an essential consideration for understanding the evolving landscape of monetary policy coordination between the two economies.
The rate differential presents both opportunities and challenges for capital flows and foreign exchange stability in Mexico. The rate differential creates a complex environment for market participants, influencing capital flows into and out of Mexico. This significant gap could lead to heightened interest from foreign investors seeking higher yields, yet it also raises concerns over potential currency volatility. As Banxico navigates this nuanced landscape, maintaining stability amid external pressures will be pivotal for sustained economic growth.
The central bank's policy rate is the primary tool for steering inflation and economic activity. Banxico targets 3% annual inflation and adjusts its overnight interbank rate to influence borrowing costs throughout the economy. The rate differential with the United States affects capital flows and exchange rate dynamics — a wider spread can attract foreign investment but may constrain domestic credit. Policy decisions are announced roughly every six weeks following scheduled monetary policy meetings.
Updated: 2026-06-16 by Pablo Rivas
Key Takeaways
With fresh insights from our internal expectations, the landscape for Banxico's upcoming policy decision is coming into sharper focus. As we gear up for the June 25th meeting, the model indicates a substantial chance of no action, with the hold probability sitting at about 58%. This suggests that markets are bracing for a pause in policy rates, reflecting a cautious approach amidst rising concerns about economic policy uncertainty and a drop in consumer confidence. The expected move now hovers around a modest -11bp, with the modal bucket landing at ±0bp, while the -25bp bucket also holds significant weight at nearly 39%. Compared to our last expectations, there's been a material swing toward the hold scenario, underscoring the shifting dynamics at play.
On the data front, several key driver variables have been updated since our last brief. Most notably, recent indicators have shown a slight decline in consumer confidence, while inflation expectations remain relatively stable. These updates highlight the ongoing tug-of-war in the economy, providing a nuanced view that policymakers will need to navigate carefully.
Diving deeper into the drivers, the interplay of various economic factors is shaping the outlook. The moderate dovish pull from declining consumer confidence stands out as a significant influence, while geopolitical tensions and external economic pressures are exerting a slightly hawkish pull on the decision-making process. On the flip side, the MXN/USD exchange rate has introduced some negative pressures, complicating the committee's task. As always, it's crucial to remember that the ultimate decision will hinge on the committee's judgment, balancing these diverse influences against the broader economic landscape.
Ordered Probit Probabilities
| Rate Change | 04 Feb | 05 Feb 2026 | Δ |
|---|---|---|---|
| Cut | 58.4% | 42.0% | -16.4 |
| Hold | 41.6% | 58.0% | +16.4 |
| Hike | 0.0% | 0.0% | +0.0 |
| E[Δrate] | -17.5 bp | -11.3 bp | +6.2 bp |
Probabilities in %. Modal bin in bold. E[Δrate] = probability-weighted expected change in basis points.
When markets and the public can anticipate how and why the central bank acts, uncertainty falls and policy becomes more effective. Clear communication helps businesses plan investments, households make borrowing decisions, and international investors gauge currency risks. Economists often stress the importance of clarity and traceability — the ability to follow and understand decisions step by step. Without it, rate moves risk being misread, causing volatility instead of stability. With it, policy signals are more credible, anchoring expectations and strengthening the central bank's influence.
Rate-change probabilities are estimated using an ordered probit model with eight macroeconomic and financial drivers: consumer price inflation (CPI), consumer confidence, the 30-day peso/dollar change, the CETES 28-day spread, stock market growth, the yield curve slope (10Y minus 2Y), Mexico's Economic Policy Uncertainty index, and the Fed-Banxico rate differential. The model maps these drivers into probability bins for the next monetary policy decision, ranging from cuts of 50 basis points or more to hikes of the same magnitude. Coefficients are estimated on the historical record of Banxico decisions and their pre-decision data environment. Probabilities update daily as driver series refresh and should be treated as one input among many.
Out-of-sample backtest across 24 past meetings: the modal prediction matched the actual decision 46% of the time, directional accuracy (hike/hold/cut) was 67%, Brier score 0.720. Out-of-sample backtest across 24 past meetings: the modal prediction matched the actual decision 46% of the time, directional accuracy (hike/hold/cut) was 67%, Brier score 0.720. Lower Brier scores indicate better-calibrated probability forecasts.
Updated: 2026-06-16 by Pablo Rivas
Key Takeaways
Bond prices as of 2026-06-16 show the 10Y-3Y spread at 1.42%, reflecting a stable trajectory despite recent market fluctuations. The latest yield curve data reveals the nominal 10Y-3Y spread at 1.42% and the real spread at 0.48%, both indicating a normal curve shape with recent upward movements of 0.13% and 0.06%, respectively. With the implied inflation spread at 0.94%, market participants appear to expect moderate inflation pressures going forward. This suggests a cautious optimism among investors, as the spreads signal a firm belief in stability, even as external factors loom large on the horizon.
The curve shape suggests that markets are pricing in a hold on the policy rate, aligning with the consensus ahead of Banxico's upcoming meeting. Markets appear to be pricing a likely hold on the policy rate with an 80% probability, which is consistent with the current yield curve dynamics. However, a disconnect remains, as persistent concerns around the MXN/USD exchange rate and geopolitical tensions could complicate the central bank's decision-making process. This creates an intriguing backdrop, with policymakers needing to balance stability against the pressures of potential external shocks.
Yield Spread Update
| Spread (10Y−3Y) | 12 Jun | 15 Jun 2026 | Δ | NS-DFM |
|---|---|---|---|---|
| Nominal | 1.42 | 1.42 | +0.002 | 1.37 |
| Real | 0.46 | 0.48 | +0.022 | 1.11 |
| Inflation | 0.96 | 0.94 | -0.020 | 0.26 |
All values in percentage points. NS-DFM = Nelson-Siegel Dynamic Factor Model filtered estimate.
When investors and businesses trust that monetary policy will remain credible and predictable, long-term interest rates respond more smoothly to central bank signals. Yield curve spreads between long and short maturities serve as a real-time gauge of this alignment: a stable, upward-sloping curve suggests markets expect gradual normalization, while persistent inversions often signal that markets anticipate policy shifts before they are announced. For Mexico, where inflation targeting depends on anchoring expectations across a diverse investor base, the 10-year minus 3-year spread offers a compact summary of whether policy communication is landing as intended.
Yield curve spreads are filtered using a Nelson-Siegel Dynamic Factor Model (NS-DFM) estimated on weekly data. The model ingests 16 synthetic yield curve points — 11 nominal maturities (overnight through 30 years) and 5 real maturities (overnight through 30 years) — fitted via Nelder-Mead optimization on Banxico bond prices. Factor loadings follow the Diebold-Li (2006) Nelson-Siegel parameterization, decomposing each yield curve into level, slope, and curvature components for both real rates and implied inflation. The Kalman smoother extracts filtered spread estimates that track the underlying signal in daily bond market noise.
So…what is this—and why am I doing it?
This project began with a simple question in 2021: how much of the work of producing useful economic information can we hand over to machines? Monitoring Monetary Policy in Mexico is a thought experiment at that frontier. By combining statistical analysis, tailored visualizations, and large language models, it demonstrates how even highly specialized topics—such as Mexican monetary policy—can be made more accessible, relevant, and insightful. Meanwhile, the system is designed to run without human intervention on a daily basis. My role is to set the design; the automation carries it out.
When does data stop being a dump and start being a story?
The initiative builds on my earlier Monitoring Mexico project but has since evolved in important ways. Data is no longer simply displayed; it is analyzed, distilled, forecasted, visualized, interpreted, narrated, and contextualized. Large language models help transform both raw and modeled data into context, turning numbers into stories. In short, raw information is transformed into understanding.
Who’s in charge here—a Raspberry Pi or common sense?
Behind the scenes, the site runs on a Raspberry Pi 5 powered by Python and a library of custom routines. Automation drives much of the process, but human expertise remains essential in designing the explanation and presenting the material. The balance between machine efficiency and human judgment is what makes the project work.
How do we cut through the jargon and keep the signal?
The aim is straightforward: to bring clarity to an area often obscured by technical detail. Monetary policy shapes households, firms, and markets, yet its analysis usually remains confined to experts. By filtering, explaining, and visualizing the data, this project seeks to make that knowledge more transparent and more useful.
Is this the 80/20 rule you learn in business school in the wild?
At its core, the site is both a contribution to public understanding and an exploration of how informational value is created. It is a humble attempt to deliver 80% of the insights of a central bank analysis with 20% of the resources—while also testing what the future of knowledge generation might look like.
What might be new the next time you drop by?
This is very much a work in progress, with new features, analyses, and visualizations added over time. We can now at the brink of generating our very own economic policy uncertainty (EPU) index, and we consider a newsletter. But maybe a chatbot might be more appropriate? Coming back to check for updates is always a good idea. If the site sparks curiosity, fosters dialogue, or simply helps illuminate Mexico’s economic dynamics, it has achieved its goal.
Updated: 2026-06-10 by Alexander Dentler
Key Takeaways
The mid-May 2026 CPI release shows headline inflation at 3.71%, continuing to reflect stability within Banxico's target range. The mid-May 2026 CPI release shows headline inflation at 3.71%, placing it in the 34th percentile and well within Banxico's 2%-4% target band. This figure marks a decline of -0.28 from the previous month, indicating a continued easing trend in consumer price growth. The recent five-month downward streak in headline inflation suggests a dampening of cost-of-living increases, which could provide a more favorable backdrop for monetary policy considerations as Banxico approaches its upcoming meeting.
Core inflation, which excludes volatile food and energy prices, presents a more complex picture. Core inflation, which excludes volatile components, stands at 4.23%, reflecting a modest decrease of -0.05 from the previous month. This level is above the target, diverging from headline inflation, which indicates underlying inflationary pressures remain more persistent. The slight reduction in core inflation suggests that while there is some easing, it is not sufficient to align core prices with Banxico's target, necessitating careful monitoring as policymakers weigh their options.
Trade prices have shown notable shifts, particularly in export prices. Trade prices have experienced significant movements, with export prices rising to 15.25%, placing them in the 93rd percentile historically. This increase, a reflection of strong global demand dynamics, underscores the interconnectedness of domestic inflation with international market trends. Meanwhile, import prices also climbed to 4.41%, further complicating the inflation landscape for Banxico as they navigate the pressures from both domestic and external sources.
| 2H May 2026 | 2H May 2027 | |||||
|---|---|---|---|---|---|---|
| Series | Current | Prev. Fcast | Error | 12M Fcast | Prev. 12M | Rev. |
| Headline CPI | 3.7 | — | — | 4.7 | 4.7 | +0.00 |
| Core CPI | 4.2 | — | — | 4.2 | 4.2 | +0.00 |
| Export Price Index | — | — | — | 5.0 | 5.0 | +0.00 |
| Import Price Index | — | — | — | 5.0 | 5.0 | +0.00 |
All values in percentage points (YoY, seasonally adjusted). "Error" = actual minus previous forecast. "Revision" = change in 12-month outlook since last update. "—" = no prior forecast available.
The Consumer Price Index (CPI) measures changes in the cost of a representative basket of goods and services purchased by Mexican households. Banxico targets 3% annual inflation with a tolerance band of 2%-4%. Core CPI — which excludes volatile food and energy prices — reveals underlying inflation trends that guide monetary policy. Import and export price indices extend the picture by linking Mexico's inflation dynamics to global markets, trade flows, and currency movements.
Headline CPI, core CPI, export prices, and import prices are projected six months ahead using a Vector Autoregression (VAR). The four series are estimated jointly, so each informs the others' forecasts through lagged interactions. Projections update each time new CPI data arrive and may shift materially after revisions.
Out-of-sample backtest over 68 evaluation windows using the Vector Autoregression (VAR). Out-of-sample backtest over 68 evaluation windows using the Vector Autoregression (VAR). RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. Headline CPI (RMSE 1.10 vs 1.04 naive, n=68); Core CPI (RMSE 0.66 vs 1.08 naive, +39% improvement, n=68); Export Price Inflation (RMSE 7.27 vs 7.77 naive, +6% improvement, n=56); Import Price Inflation (RMSE 2.99 vs 2.05 naive, n=56).
Updated: 2026-03-27 by Alexander Dentler
Key Takeaways
The latest update on the SHF House Price Index reveals that house price inflation reached 8.92% YoY as of October 1, 2025, reflecting a continuing trend of rising prices over the past three quarters. This inflation rate stands above the historical average, which has ranged from 2.0% to 11.7%, positioning it in the 80th percentile since 2006. Notably, house price inflation exceeds both headline CPI at 4.02% and housing CPI at 3.44%, highlighting a significant premium of 4.90 percentage points over the former and 5.49 percentage points over the latter. This divergence suggests a robust demand in the housing market that may not be fully captured by broader inflation metrics, although the recent DFM nowcast hints at potential downward pressure.
The Dynamic Factor Model (DFM) nowcast indicates a contrasting picture, with a current estimate of 7.72% YoY as of February 1, 2026, trailing the observed inflation by 1.20 percentage points. This divergence implies that auxiliary indicators, particularly mortgage lending trends and housing CPI components, are exerting downward pressure on the underlying trend. The model suggests that while house prices have been rising, there may be emerging signs of mean reversion, prompting a cautious stance on future price increases. Policymakers and market participants should consider this nuanced interplay when assessing the housing market's outlook.
DFM Nowcast Comparison
| Observed | Nowcast | Prev. Nowcast | Gap | Revision | |
|---|---|---|---|---|---|
| SHF House Price Inflation (YoY) | 8.92% | 7.72% | 7.72% | -1.20 | +0.00 |
Observed: 2025-Q4. Nowcast: 2026-02. Previous nowcast: 2026-02. "Gap" = nowcast − observed. "Revision" = change in nowcast since previous run.
The SHF House Price Index is published quarterly by Sociedad Hipotecaria Federal, Mexico's federal mortgage development bank, typically around 40 days after the reference quarter ends. It is constructed from mortgage appraisal data (avalúos) using a Case-Shiller repeat-sales methodology, with breakdowns by state, new vs. used housing, and market segment (affordable vs. mid-to-high-end). Because the index reflects prices at the point of mortgage origination, it captures credit-driven demand rather than asking prices, making it a tighter gauge of actual transaction values and collateral quality across the housing market.
A Dynamic Factor Model (DFM) filters the quarterly SHF House Price Index using five Banxico auxiliary series — the funding rate, mortgage lending volumes, a housing purchase survey indicator, the SPF unemployment forecast, and construction activity — plus two CPI components (headline and housing subcategory). The model extracts a common factor from these seven indicators, producing a smoothed nowcast that updates between quarterly SHF releases whenever auxiliary data arrive. This filtered estimate helps distinguish persistent trends from quarterly noise in the observed house price series.
Out-of-sample backtest over 12 evaluation windows using the Dynamic Factor Model (DFM). Out-of-sample backtest over 12 evaluation windows using the Dynamic Factor Model (DFM). RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. House Price Nowcast (RMSE 1.32 vs 0.66 naive, n=12).
Updated: 2026-06-06 by María López
Key Takeaways
Brent oil prices just jumped to $106.30 as of May 2026, reflecting a staggering YoY increase of 65.8%. Brent oil prices through May 2026 show a notable rise, landing at $106.30. This marks a significant YoY change of +65.8%, and the momentum is clearly up, with prices climbing in recent days. For Mexico, where oil is a major export and accounts for about 15% of federal revenue, these figures are crucial — they could bolster government finances and Pemex operations.
Copper prices are hitting $13,483.75, up 41.5% YoY as of May 2026. With copper data updated to May 2026, the current price stands at $13,483.75, showcasing a robust YoY increase of 41.5%. The trend remains upward, indicating strong demand in the global market. Given that Sonora dominates copper production in Mexico, this surge could enhance regional economic activity, despite the sector's small employment footprint.
Corn prices are at $215.62, reflecting a modest YoY increase of 5.3%. As of May 2026, corn prices reached $215.62, showing a slight YoY rise of 5.3%. The trend appears stable, neither soaring nor plummeting significantly. This is particularly relevant for Mexico, where corn is a staple for many, and price stability is key for the 1.5 million smallholder farmers dependent on this crop.
Commodity prices feed directly into Mexico's inflation pulse and terms of trade. Oil and corn affect energy and food costs, while copper is a proxy for global industrial demand. For policymakers, sharp commodity swings can shift inflation expectations and fiscal balances, making these prices critical to monitor.
Updated: 2026-06-10 by Alexander Dentler
Key Takeaways
The May 2026 IMSS release shows unit labor costs at 2.80%, indicating a concerning trend of wages outpacing productivity. Following May's formal sector wage data, ULC in manufacturing is rising, reflecting a potential for cost-push inflation pressures. With the latest growth rate at the 70th percentile, this upward movement suggests that wages are increasing faster than productivity, which may pose a challenge for competitiveness in the sector. The month-on-month change of -0.21% indicates a slight deceleration, yet the overall rising trend remains significant.
Real wages in the formal sector are showing promising growth, suggesting an improvement in purchasing power for workers. The latest data reveals that real wages in manufacturing are up 4.47%, reflecting positive gains for households in the sector. This increase enhances purchasing power, enabling workers to enjoy a larger share of economic output. Although there has been a slight month-on-month decrease of -0.10%, the overall trajectory remains favorable, supporting consumer confidence.
Manufacturing and retail diverge in their wage dynamics, particularly in real wage growth. Manufacturing outperforms retail, with real wages in manufacturing at 4.47%, compared to retail's 3.35%. This divergence suggests that manufacturing workers are experiencing a more substantial increase in purchasing power as compared to their retail counterparts. The slower growth in retail indicates potential challenges in that sector, which may affect overall consumer spending patterns.
SARIMAX Forecast Comparison
| Series | Current | Prev. Forecast | Error | 12M Forecast | Prev. 12M | Revision |
|---|---|---|---|---|---|---|
| ULC Manufacturing | — | — | — | 3.7 | 3.7 | +0.00 |
| ULC Retail | — | — | — | 0.2 | 0.2 | +0.00 |
| Real Wage Mfg | — | — | — | 5.0 | 5.0 | +0.00 |
| Real Wage Retail | — | — | — | 2.9 | 2.9 | +0.00 |
All values in % (MoM, seasonally adjusted). "Error" = actual − previous forecast. "Revision" = change in 12-month outlook. "—" = no prior forecast available.
Unit labor costs (ULC) measure the average cost of labor per unit of output — when wages grow faster than productivity, ULC rises, potentially squeezing profit margins and fueling inflation. In Mexico, where the formal sector employs roughly half the workforce, IMSS-registered wage data captures trends in the formal economy but misses the informal sector's dynamics. Real wages — nominal wages adjusted for inflation — determine household purchasing power and underpin consumer demand. For policymakers, these indicators help balance inflation control, competitiveness, and the economic welfare of Mexican workers.
Twelve-month-ahead forecasts for unit labor costs and real wages in manufacturing and retail are produced using a Seasonal Autoregressive Integrated Moving Average with eXogenous inputs (SARIMAX) model. The model is estimated on seasonally adjusted month-over-month percentage changes, with all four series — ULC manufacturing, ULC retail, real wage manufacturing, and real wage retail — entering as joint endogenous variables. No external auxiliary data feed the forecast; the model relies solely on the internal dynamics and cross-series interactions of the wage and productivity data. Forecast confidence intervals widen over the projection horizon.
Out-of-sample backtest over 24 evaluation windows using the SARIMAX. Out-of-sample backtest over 24 evaluation windows using the SARIMAX. RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. ULC Manufacturing (RMSE 2.97 vs 3.21 naive, +7% improvement, n=24); ULC Retail (RMSE 5.33 vs 5.22 naive, n=23); Real Wage Manufacturing (RMSE 2.20 vs 2.62 naive, +16% improvement, n=24); Real Wage Retail (RMSE 3.05 vs 2.97 naive, n=23).
Updated: 2026-03-21 by María López
Key Takeaways
Following the latest quarterly GDP release from INEGI, real GDP growth in Mexico has surged to an impressive 8.81%, reflecting a significant increase of 6.51 percentage points from previous estimates. The nowcast estimate, updated with the latest data, shows that real GDP growth has leapt to 8.81% for Q4 2025, marking a notable change of +6.51pp from previous projections. This explosive growth rate highlights the dynamic recovery occurring within the economy, setting a positive tone for future economic discussions and policy deliberations.
Private consumption continues to play a pivotal role in this economic momentum, reaching a staggering growth rate of 10.48%. Household spending is clearly supporting overall activity, significantly outpacing GDP growth. This surge in private consumption signals strong domestic demand, which is essential for sustaining the recovery and potentially alleviating some of the pressures from external factors.
Exports, however, tell a different story, with growth currently at -1.01%, reflecting a substantial decline of 6.22 percentage points. This downturn in export activity indicates weakening external demand, a concerning signal for an economy that heavily relies on trade, especially with key partners. It raises alarms about competitiveness and the potential impact on sectors tied to global markets, which could dampen growth if the trend continues.
On the flip side, imports are showing a robust growth rate of 7.47%, up by 2.10 percentage points from previous estimates. Domestic absorption is clearly on the rise, suggesting that businesses and consumers are optimistic and willing to invest in goods from abroad. This trend can bolster local economic activity, despite the underlying challenges posed by sluggish export performance.
DFM GDP Nowcasts
| Component | Last Obs. (Q4 2025) | Nowcast (Q4 2025) | Prev. Nowcast | Revision |
|---|---|---|---|---|
| Real Gross Domestic Product | 9.60% | 8.81% | 8.81% | +0.00 |
| Private Consumption | 5.88% | 10.48% | 10.48% | +0.00 |
| Imports | 28.72% | 7.47% | 7.47% | +0.00 |
| Exports | -1.01% | -1.01% | -1.01% | +0.00 |
QoQ annualized, seasonally adjusted. Nowcast = DFM filtered estimate using higher-frequency inputs. "Revision" = change from previous run.
Real activity data tracks the economy's engine — output, spending, and trade — while nowcasts bridge the lag between releases. Real GDP captures total production; private consumption reflects household demand; exports and imports reveal external demand and the flow of inputs for Mexico's trade-exposed, manufacturing-heavy economy. Shifts in U.S. demand, global prices, and the peso often show up first in trade, then filter into GDP and consumption. Because official series arrive with delays and revisions, model-based nowcasts provide an early, probabilistic read for policy timing — useful if treated with uncertainty bands and cross-checked against higher-frequency signals.
A Dynamic Factor Model (DFM) nowcasts quarterly GDP and its demand components — private consumption, imports, and exports — using 14 higher-frequency inputs. These include monthly employment indicators, industrial production (IGAE), consumer confidence, capacity utilization, retail sales, and private consumption, plus quarterly GDP sector breakdowns. The model extracts common factors via the Kalman filter, updating the nowcast each time any input series receives new data. Nowcast estimates are conditional expectations that narrow as more data arrive within each quarter.
Out-of-sample backtest over 12 evaluation windows using the Dynamic Factor Model (DFM). Out-of-sample backtest over 12 evaluation windows using the Dynamic Factor Model (DFM). RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. Real GDP (RMSE 3.90 vs 3.82 naive, n=12); Private Consumption (RMSE 5.41 vs 2.51 naive, n=12); Exports (RMSE 22.26 vs 18.28 naive, n=12); Imports (RMSE 11.34 vs 17.09 naive, +34% improvement, n=12).
Updated: 2026-06-16 by Pablo Rivas
Key Takeaways
The latest ENOE survey for April 2026 shows unemployment at 3.83%, reflecting a slight uptick in an otherwise stable landscape. The April 2026 ENOE survey shows unemployment at 3.83%, up 0.07% from the previous month. This marks a continuation of a six-month upward trend, indicating a potential tightening in the labor market. While still below the historical mean, this rise suggests that economic pressures may be beginning to weigh on job availability as we head into the warmer months.
By gender, the unemployment rates reveal a nuanced picture that merits attention. Male and female unemployment rates are currently at 3.34% and 3.53%, respectively, with both genders seeing a slight decline over the past month. However, the male unemployment rate remains marginally lower than that of females, highlighting a persistent divergence in labor market outcomes that could signal underlying challenges for women in securing stable employment.
The share of informal workers remains a critical concern for the labor market. Informal employment is currently at 55.6%, showing a monthly increase of 0.02%. This uptick indicates that while some workers may be finding jobs, they are increasingly entering the informal sector, which raises questions about job quality and economic security. A rising informal workforce could complicate efforts to stabilize the economy and improve overall labor conditions.
DFM Employment Nowcasts
| Indicator | Last Obs. (Q2 2026) | Nowcast (Q2 2026) | Prev. Nowcast | Revision |
|---|---|---|---|---|
| Unemployment Rate | 2.56% | 3.00% | — | — |
| Underemployment Rate | 10.28% | 12.31% | — | — |
| Male Unemployment | 2.45% | 3.34% | — | — |
| Female Unemployment | 2.71% | 3.53% | — | — |
Observed = latest quarterly ENOE value. Nowcast = DFM filtered estimate using monthly auxiliary data. "Revision" = change from previous run.
Labor slack and its composition shape inflation pressure, policy timing, and social risk. Unemployment, underemployment, and unemployment by gender reveal how broad and uneven slack is. In Mexico's large informal sector, the informal employment share can swing sharply — often contracting faster in downturns as unprotected jobs are cut first, then rebounding early — masking true slack if headline unemployment alone is tracked. Tracking these dimensions helps distinguish cyclical slack from structural mismatches and calibrate monetary policy accordingly.
Between quarterly ENOE survey releases, a Dynamic Factor Model (DFM) nowcasts employment indicators using higher-frequency auxiliary data. The model ingests monthly series — industrial production, consumer confidence, capacity utilization, retail sales, and private consumption — alongside quarterly GDP components to extract common factors that track the business cycle. When any auxiliary series receives new data, the Kalman filter updates the nowcast, providing an early signal before the next official employment release.
Out-of-sample backtest over 19 evaluation windows using the Dynamic Factor Model (DFM). Out-of-sample backtest over 19 evaluation windows using the Dynamic Factor Model (DFM). RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. Unemployment (RMSE 0.56 vs 0.13 naive, n=16); Underemployment (RMSE 1.26 vs 0.50 naive, n=11); Male Unemployment (RMSE 0.44 vs 0.26 naive, n=11); Female Unemployment (RMSE 0.44 vs 0.28 naive, n=11).
Updated: 2026-06-12 by María López
Key Takeaways
INEGI's Q2 2026 productivity release shows secondary sector output at 102, reflecting a solid 2.13% increase from the previous month. The latest INEGI productivity data for Q2 2026, released on June 12, reveals that secondary sector output is holding strong, driven by notable gains in construction and manufacturing. This growth is broad-based, with the construction sector leading the charge, signaling resilience against inflationary pressures. Meanwhile, mining lags behind, indicating potential instability in that subsector.
Manufacturing composites show a mixed bag of trends, highlighting sustainability concerns. Across the PCA indices, productivity dipped slightly while sales and inventory dynamics suggest a tightening labor market. The divergence in labor demand—currently at a low of -1.49—raises red flags about future growth potential, especially as rising inventory levels could indicate overproduction risks.
Within manufacturing, construction shines while the chemical industry struggles. The top-performing subsectors include construction, which is at the 99th percentile, showing a whopping 7.76% increase, while the chemical industry underperforms in the 21st percentile, down 7.74%. The robust construction output significantly bolsters the overall manufacturing index, but the decline in chemicals underscores the volatility and challenges facing specific industries.
PCA Composite Indices
| Index | May 2025 | Jun 2025 | Δ |
|---|---|---|---|
| Productivity Index | 0.50 | 0.28 | -0.22 |
| Sales Index | 0.58 | 0.61 | +0.03 |
| Inventory Index | 0.15 | -0.03 | -0.18 |
| Labor Demand Index | -1.32 | -1.49 | -0.17 |
Standardized scores (0 = mean, ±1 = one standard deviation).
Productivity trends reveal the economy's capacity to grow without stoking inflation. In Mexico, productivity in the secondary sector — mining, energy, construction, and especially manufacturing — signals how efficiently output expands relative to inputs. Strong productivity gains mean firms can meet demand without raising prices, easing inflation pressure and supporting sustainable wage growth. Weak productivity, by contrast, constrains supply, making cost shocks more inflationary. Manufacturing deserves closer scrutiny, as its diverse subsectors respond differently to global demand, exchange rate shifts, and investment cycles. Tracking these patterns helps judge whether growth is supported by efficiency gains or reliant on credit and labor cost increases.
Four composite indices — productivity, sales, inventory, and labor demand — are constructed using Principal Component Analysis (PCA) applied to INEGI manufacturing subsector data and GDP sector composition. PCA extracts the dominant co-movement pattern across subsectors, producing standardized indices that summarize broad trends while filtering out subsector-specific noise. The productivity index draws on output-per-worker measures across manufacturing branches; the sales, inventory, and labor demand indices use INEGI's corresponding survey-based indicators supplemented by GDP sector weights.
Updated: 2026-06-05 by María López
INEGI's latest May release reveals confidence at an elevated level of 1.04, but that's down from last month, signaling a notable dip in consumer sentiment. The May 2026 consumer confidence survey shows the general index at 1.04, placing it in the 81st percentile—still elevated, but it fell by 0.19 compared to April. This decline signals growing unease among consumers, with the housing-specific index suffering a sharper drop of 0.37, reflecting mounting concerns in that sector. While durable goods confidence remains robust at 1.02, up slightly, the divergence highlights that housing sentiment is dragging down the overall picture. With such a significant gap, it’s clear consumers are more hesitant about housing investments amid ongoing economic uncertainties.
PCA Confidence Indices
| Index | Apr 2026 | May 2026 | Δ |
|---|---|---|---|
| General Sentiment | 1.22 | 1.04 | -0.19 |
| Housing Appetite | 0.69 | 0.32 | -0.37 |
| Durables Appetite | 0.94 | 1.02 | +0.08 |
Values are z-scores (0 = historical mean, ±1 = one standard deviation).
The ENCO (Encuesta Nacional sobre Confianza del Consumidor) is conducted jointly by INEGI and Banco de México. Roughly 2,300 households across 32 major cities are interviewed during the first 20 days of each reference month, and results are published around the 5th of the following month. The survey uses a rotating panel design — each household stays in sample for four consecutive months, rests for eight, then returns for four more — which smooths out idiosyncratic response noise while capturing genuine shifts in sentiment. Because confidence data arrive before most hard activity indicators for the same month, they provide an early read on whether household demand is strengthening or cooling.
Three composite confidence indices — general sentiment, housing appetite, and durables appetite — are extracted from the eight raw INEGI survey questions using Principal Component Analysis (PCA). PCA identifies the common variation within each question group, producing a single index that captures the dominant signal while filtering out question-specific noise. The general index draws on six broad economic outlook questions; the housing and durables indices each isolate spending appetite in categories most sensitive to interest rates and household balance sheets.
COMING SOON...
Updated: 2026-06-02 by Ignacio Crane
Key Takeaways
The May 2026 SPF survey shows the aggregate Concern Index at 2.96, reflecting a modest decline in sentiment. The May 2026 SPF survey shows the aggregate Concern Index at 2.96, corresponding to the 65th percentile. The index fell by 0.0141 from the previous month, suggesting a slight easing of concerns among economic forecasters. This decline, while modest, is indicative of a broader trend of stabilization after a period of heightened anxiety in earlier months.
Economists have identified public insecurity, US trade policy, and a lack of structural change as the primary growth constraints currently impeding progress. The key constraints currently cited include public insecurity at 9.6%, US trade policy at 6.4%, and a lack of structural change at 4.8%. Notably, public insecurity experienced the largest month-over-month increase of 1.00%, underscoring the persistent challenges that this issue poses for economic stability and growth.
The perceived probability of recession remains moderate among surveyed economists, reflecting a cautious outlook. The perceived probability of recession stands at 20.0%, placing it within the 68th percentile historically. This level of concern is subdued relative to historical norms, suggesting that while apprehensions exist, they are not at alarmingly high levels. The probability remains consistent with the previous quarter, indicating stability in the economic outlook despite underlying uncertainties.
According to forecasters, there is a consensus that the peso is currently overvalued, reflecting ongoing concerns about its exchange rate trajectory. FX expectations suggest that forecasters view the peso as overvalued, with current-month misalignment at +0.097. This perception of overvaluation persists across horizons, indicating a sustained skepticism about the currency's real value in the near term. Such sentiments could influence investor behavior and overall economic sentiment moving forward.
Banxico's Survey of Professional Forecasters (Encuesta sobre las Expectativas de los Especialistas en Economía del Sector Privado) polls roughly 40 groups of analysts from banks, financial institutions, consultancies, and research centers. Responses are collected during the second half of each reference month — typically between the 15th and 28th — and results are published on the first business day of the following month. Because respondents form their expectations before some end-of-month official data releases, the survey provides an early window into shifting professional sentiment on inflation, growth constraints, recession risk, and exchange rates, making it a valuable leading indicator for policymakers and market participants.
Updated: 2026-06-16 by Pablo Rivas
Key Takeaways
Mexican equity markets as of June 16, 2026, show excess returns at -0.2169, reflecting ongoing turbulence and a cautious investor sentiment. With data through June 16, 2026, realized volatility is pegged at 0.0122, hinting at some jitteriness in the market. The most recent figures reveal a notable uptick in illiquidity, with the Amihud index rising to 147.1455, signaling a tightening grip on market dynamics. This comes against a backdrop of heightened uncertainty as traders digest the implications of the upcoming Banxico policy meeting and the ongoing concerns surrounding public security and economic stability.
The decomposition shows that recent volatility has been driven primarily by US policy shocks and liquidity challenges. Top contributors to the current market turbulence include investor sentiment and external financial conditions, which appear to be weighing heavily on domestic equities. These factors have created a complex interplay of influences, suggesting that while some volatility is driven by external shocks, domestic concerns around political stability and economic policy are increasingly influential.
Investor sentiment is leaning towards caution, as indicated by the latest readings of economic policy uncertainty. Policy uncertainty levels remain elevated, with discussions on social media reflecting alarm over public security issues and economic governance. This atmosphere of trepidation underscores the delicate balance Banxico must strike in its upcoming decision, as stakeholders remain wary of the potential for external shocks amidst domestic challenges.
Volatility Measures
| Measure | May 2026 | Jun 2026 | Δ | Top Driver |
|---|---|---|---|---|
| Excess Return | 0.0283 | -0.0753 | -0.1036 | US Policy Shocks (+0.127) |
| Realized Volatility | 0.0093 | 0.0107 | +0.0014 | Liquidity and Financing (+0.001) |
| Illiquidity (Amihud) | 94.5836 | 118.3968 | +23.8132 | Real-Sector Difficulties (-14.261) |
Monthly averages. Top Driver = largest OLS category contribution to latest value.
Financial market returns, volatility, and liquidity signal investor sentiment and risk appetite. Excess returns over government bonds capture the risk premium investors demand for holding equities; wider spreads suggest higher perceived risk or stronger growth prospects. Realized volatility in a stock market index reflects uncertainty — sharp swings indicate fragile sentiment and raise the cost of capital. Illiquidity shows how trading volume and price impact interact: when liquidity dries up, small trades can move prices disproportionately, amplifying shocks. For monetary policy, these indicators matter because they shape funding costs, investment flows, and the broader transmission of rate decisions into financial conditions.
Volatility drivers are analyzed in two steps. First, Principal Component Analysis (PCA) groups the six SPF concern categories and investor sentiment indicators (AAII bull-bear spread, NAAIM exposure index) into thematic driver clusters that capture common variation. Second, an OLS regression decomposes recent volatility movements into contributions from each driver cluster, quantifying how much of the observed excess return and realized volatility is attributable to policy uncertainty, external sentiment, and domestic macro conditions. The decomposition is descriptive — it identifies contemporaneous associations, not causal effects.
Updated: 2026-06-16 by Pablo Rivas
Key Takeaways
Banxico's June 2026 credit release shows money market spreads tightening as the latest TIIE spreads reflect a cautious market sentiment. Following the latest June lending data, rate premia are tightening, with TIIE 28d at 0.25% and TIIE 91d remaining steady at 0.29%. The narrowing trend, down by 0.0306% in the last month, indicates a return of some confidence in the financial sector, although the current spread remains low historically. This shift suggests that while the market anticipates a hold on the policy rate, the underlying economic uncertainties are still weighing on lending conditions.
Household mortgage rates remain elevated, signaling affordability challenges for potential buyers. The total annual cost of mortgages (CAT) averages 14%, with a range from 10.7% to 28.2%. This level of mortgage costs reflects a tightening pass-through from policy rates, which could stymie housing demand as affordability dips for many families. With the policy rate expected to hold, these elevated costs may further entrench a wait-and-see approach among prospective homebuyers.
Debt issuance patterns show a leaning towards fixed-rate financing as firms navigate uncertain economic waters. Recent trends indicate that corporate financing is becoming more reliant on fixed-rate debt, which now comprises 18.74% of total issuance. This shift suggests firms are seeking stability in a volatile economic environment, moving away from variable rates that could expose them to future rate hikes. The lack of any recent increase in overall debt issuance—currently at a mere 6th percentile—highlights the caution firms are exercising in their financing strategies.
Rate premia show how market and bank funding costs move relative to the policy rate, indicating the efficiency of monetary transmission. Household mortgage rates capture the cost of long-term borrowing — their sharp rise in recent years signals affordability pressures and distributional effects, as many families face double-digit costs. Debt issuance patterns, normalized by GDP, reveal how firms finance themselves; the balance between fixed and variable rates matters for vulnerability to policy shifts. Together, these indicators show how policy rates filter into real borrowing conditions, affecting credit demand, investment, and ultimately growth and inflation dynamics.
