Stay informed with the latest insights on Mexico's economy via statistics and AI analysis and synthesis.
Updated: 2026-03-06
UN Women emphasized the importance of inclusive markets in enhancing economic resilience. The organization highlighted that inclusive economic practices lead to stronger growth and development. They called for policies that promote gender equality and empower women in the workforce, asserting that such measures are crucial for sustainable economic progress. — El Economista, 06 Mar 2026. Read more
A recent Citi survey indicates an improved forecast for the Mexican peso's performance by the end of 2026, despite ongoing conflicts in the Middle East. Analysts have adjusted their expectations positively, reflecting confidence in Mexico's economic resilience under President Claudia Sheinbaum's administration and the leadership of Banxico Governor Victoria Rodríguez Ceja. — El Financiero, 06 Mar 2026. Read more
Izzi has announced a price increase for its services effective March 2026. The new tariffs will apply to various plans, although specific figures were not disclosed in the article. This change comes as part of the company's strategy to adjust its pricing structure. — El Financiero, 05 Mar 2026. Read more
Citi has revised its expectation for Mexico's GDP growth in 2026 to 1.5%. The next interest rate cut is anticipated in March, as indicated by the survey results. This adjustment reflects the current economic outlook and expectations for monetary policy changes. — El Economista, 05 Mar 2026. Read more
The Mexican peso declined by 1.31% against the US dollar as market sentiment shifted towards risk aversion. This movement reflects growing concerns among investors, impacting the currency's performance in the foreign exchange market. — El Economista, 05 Mar 2026. Read more
The Mexican peso has depreciated more than 1% due to heightened risk aversion in the market. This decline reflects concerns among investors regarding economic stability and potential impacts on the currency. The situation is being closely monitored by financial authorities. — El Economista, 06 Mar 2026. Read more
The Mexican peso closed at 17.79 units per dollar, reflecting a decline attributed to rising tensions in Iran. The exchange rate movement indicates market reactions to geopolitical developments, impacting currency stability. — El Financiero, 05 Mar 2026. Read more
The Mexican economy is showing signs of losing momentum, as indicated by recent economic indicators. The article highlights concerns regarding slow growth and inflationary pressures affecting consumer spending. Claudia Sheinbaum, the President of Mexico, is facing challenges in maintaining economic stability amid these developments. — El Financiero, 05 Mar 2026. Read more
The Mexican peso has strengthened against the US dollar as the market remains vigilant regarding developments in the Middle East. Investors are closely monitoring geopolitical events that could impact currency movements. The article highlights the peso's recovery without providing specific figures or rates. — El Economista, 04 Mar 2026. Read more
The Mexican peso closed at 17.63 units against the dollar, reflecting a decline attributed to ongoing conflicts in the Middle East. The exchange rate movement indicates market reactions to geopolitical tensions impacting currency stability. — El Financiero, 03 Mar 2026. Read more
US, Mexico launch talks ahead of North America trade pact review — Google News, 06 Mar 2026. Read more
US, Mexico to hold talks ahead of USMCA trade pact review as Trump tariffs loom — Google News, 06 Mar 2026. Read more
U.S. and Mexico launch USMCA review, eye tougher North America trade rules - CHOSUNBIZ — Google News, 06 Mar 2026. Read more
Mexico and U.S. will start talks March 16 on reviewing their free trade agreement — Google News, 06 Mar 2026. Read more
Mexico Gains Leverage Ahead of 2026 USMCA Review — Google News, 05 Mar 2026. Read more
Mexico US to start free trade agreement review talks on March 16 — Google News, 05 Mar 2026. Read more
US-Mexico Trade Discussions Set to Begin March 16 — Google News, 05 Mar 2026. Read more
US, Mexico to launch review process of USMCA trade pact week of March 16 By Reuters — Google News, 05 Mar 2026. Read more
Peso slips as oil and dollar rise on conflict signals — Google News, 05 Mar 2026. Read more
Wages and productivity in Mexico under USMCA — Google News, 04 Mar 2026. Read more
Updated: 2026-02-07 by Alexander Dentler
Key Takeaways
Following the December 18, 2025 decision, Banxico's policy rate stands at 7.00%, reflecting a recent cut of 0.25 percentage points. After Banxico's December meeting, the target rate has been held steady at 7.00%, following a cumulative reduction of 0.50 percentage points since the last hike in March 2023. The recent cut represents a strategic response to evolving economic conditions, characterized by lingering uncertainties surrounding both domestic and external factors. As Banxico prepares for its next meeting in 47 days, the focus remains on adapting to the shifting landscape of economic pressures and inflationary expectations.
The Fed's target rate currently stands at 3.62%, following a similar cut of 0.25 percentage points in December. Relative to the United States, Banxico's more aggressive rate stance reflects a proactive approach to managing inflation and economic stability amidst heightened global economic uncertainties. The recent coordination in rate cuts illustrates a shared concern over external economic conditions, yet the substantial rate differential signals diverging monetary policy paths. This dynamic places Banxico in a unique position to leverage policy tools more autonomously, especially as it navigates domestic challenges.
The rate differential is likely to influence capital flows and currency stability in the region. For markets, the significant rate differential could enhance Mexico's appeal to investors, potentially supporting capital inflows. Nonetheless, the heightened concerns surrounding rule of law and security suggest that such advantages may be offset by risks that could deter long-term investment. As Banxico maneuvers through these complexities, the interplay between rate policy and economic fundamentals will remain critical.
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: 2026-03-06 by María López
Key Takeaways
With new insights from economic indicators and shifting market sentiments, the outlook for Banxico's next move is increasingly complex. Our model-based expectations suggest a substantial chance of no action at the upcoming policy decision on February 5, 2026, with a hold probability of about 58%. This represents a material swing since our last update, where the modal bucket has shifted from -25bp to ±0bp. The data indicates that while a cut remains a consideration at 42%, the prevailing sentiment leans toward inaction as the committee weighs the implications of economic uncertainty. The model points toward the ±0bp bucket as the most likely scenario, with the -25bp option also holding a significant share of expectations.
Recent updates show that while some indicators remain stable, critical economic metrics have shifted subtly yet importantly. Since the last update, inflation data has stabilized, reflecting a cautious optimism in the market. However, economic policy uncertainty continues to loom large, influencing investor sentiments and market dynamics. The current data remains current with no major fluctuations in other key variables.
The interplay of various economic drivers reveals a landscape fraught with challenges for policymakers. Current influences suggest a slight dovish pull from declining headline inflation, while economic policy uncertainty exerts moderate hawkish pressure on the decision-making process. The peso's volatility and concerns surrounding public security are significant negative drivers that can't be overlooked. With factors like credit spreads showing negligible impact, it's clear that the committee's judgment will ultimately steer the decision, navigating through these conflicting signals.
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: 2026-03-06 by María López
Key Takeaways
Bond prices as of 2026-03-06 show the 10Y-3Y spread at 1.39%, reflecting a modest uptick from the previous observation. The latest yield curve data reveals that the nominal spread increased by 0.13% while the real spread rose to 0.54%. Both are currently in normal territory, indicating stability in the market's expectations. Breakeven inflation is now at 0.86%, which suggests that markets are pricing in mild inflation expectations, aligning with the recent downward trend in headline inflation. This combination signals a cautious approach from investors as they weigh the balance between growth and inflation risk.
The curve shape suggests markets are pricing in a potential rate cut by Banxico, reflecting a nuanced outlook on economic activity. However, this yield curve's current configuration does indicate some disconnect with the cautious tone from the Banxico committee, which emphasizes that any rate adjustments will depend heavily on economic indicators. As such, while markets expect easing, policymakers are likely to remain vigilant, balancing immediate economic concerns with longer-term stability goals.
Yield Spread Update
| Spread (10Y−3Y) | 04 Mar | 05 Mar 2026 | Δ | NS-DFM |
|---|---|---|---|---|
| Nominal | 1.44 | 1.39 | -0.044 | 1.23 |
| Real | 0.55 | 0.54 | -0.017 | 0.95 |
| Inflation | 0.88 | 0.86 | -0.027 | 0.28 |
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: 2026-03-06 by María López
Key Takeaways
The early-March 2026 CPI release shows headline inflation at 3.89%, comfortably within Banxico's target band. The early-March 2026 CPI release shows headline inflation at 3.89%, landing in the 42nd percentile and firmly within Banxico's 2%-4% target band. This rate represents a slight uptick from the previous month, increasing by 0.04%. The stability in headline inflation is crucial for Banxico as it navigates the delicate balance between promoting growth and controlling price levels. For now, this suggests that consumer price pressures are relatively manageable, allowing room for policymakers to focus on other pressing economic issues.
Core inflation, which excludes volatile food and energy prices, remains a point of concern. Core inflation, which excludes volatile components, stands at 4.55%, significantly above the target. While it has dipped slightly by 0.02% from last month, it remains high enough to raise eyebrows at Banxico, particularly as it indicates underlying inflationary pressures persist. This divergence from the headline figure signals a need for careful scrutiny, as it complicates the central bank's policy decisions and may necessitate a more cautious approach moving forward.
Trade prices reflect broader global economic dynamics, with export prices on an upward trajectory. Trade prices show a notable increase, with export prices rising to 7.05%—up 1.15% from the prior month—indicating robust demand for Mexican goods abroad. This trend could support overall economic growth but also raises questions about inflation transmission mechanisms, especially if import prices, currently at 2.30%, fail to keep pace. The disparity between export and import price growth may exacerbate trade dynamics, influencing Banxico's policy stance as they assess the impact on domestic inflation.
| 1H Feb 2026 | 1H Feb 2027 | |||||
|---|---|---|---|---|---|---|
| Series | Current | Prev. Fcast | Error | 12M Fcast | Prev. 12M | Rev. |
| Headline CPI | 3.9 | — | — | 4.3 | 4.3 | +0.00 |
| Core CPI | 4.6 | — | — | 4.0 | 4.0 | +0.00 |
| Export Price Index | — | — | — | 3.8 | 3.8 | +0.00 |
| Import Price Index | — | — | — | 3.0 | 3.0 | +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 62 evaluation windows using the Vector Autoregression (VAR). Out-of-sample backtest over 62 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 1.15 vs 1.08 naive, n=62); Core CPI (RMSE 0.67 vs 1.13 naive, +40% improvement, n=62); 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: 2026-02-06 by Jorge Martínez
Key Takeaways
The latest SHF House Price Index for Q3 2025 reveals a YoY inflation rate of 8.86%, which is about as spicy as a taco on a hot summer day. This inflation rate, reported on July 1, 2025, is comfortably above the historical average, strutting in at the 79th percentile since 2006. In the same breath, house price inflation is outpacing both the headline CPI at 3.69% and the housing CPI at 3.35%, creating a premium of over 5 percentage points in each case. Meanwhile, the DFM nowcast suggests a slight divergence from this observed rate, but let's not throw a piñata just yet; we’ll dig into that shortly.
Now, let’s unravel the mystery of the DFM nowcast, which brings some intriguing twists to our house price saga. The DFM nowcast, standing at 7.29% as of January 1, 2026, is lower than the observed 8.86%, indicating that the model detects downward pressure from auxiliary indicators like mortgage lending and CPI housing. This suggests that while house prices have been on a rollercoaster of inflation, the underlying trend is showing signs of mean reversion or cooling off, which could have implications for those still clinging to the idea of a housing bonanza. In short, the DFM is waving a caution flag, reminding us that even the hottest markets can cool down faster than a soggy tortilla.
Housing is a major household asset and a key store of wealth. Rising prices can lift balance sheets and collateral values, while falling prices can weaken credit conditions and confidence. Housing costs also shape the cost of living and affordability, making house price inflation relevant for both growth and distributional pressures in Mexico.
Updated: 2026-01-23
Key Takeaways
Brent oil prices through December 2025 reveal a disconcerting tale, settling at $61.81, a staggering 15.6% decline year-over-year. Brent oil prices through December 2025 reveal a disconcerting tale, settling at $61.81, a staggering 15.6% decline year-over-year. This downward trajectory, exacerbated by global supply chain disruptions and fluctuating demand, has cast a pall over Mexico's federal revenues, which hinge significantly on oil exports. With a three-day streak of decline, the implications for Pemex and the Campeche regional economy are as clear as a foggy morning: uncertainty looms large.
Copper, on the other hand, shines like a beacon, currently priced at $11,790.96 and boasting a robust 32.3% increase over the past year. Copper, on the other hand, shines like a beacon, currently priced at $11,790.96 and boasting a robust 32.3% increase over the past year. This metal's recent upward momentum—evident in a 9.1% monthly increase—reflects a burgeoning demand from the tech sector and a resurgence in global infrastructure projects. For Mexico's mining sector, particularly in Sonora, this trend offers a silver lining amidst the otherwise turbulent commodity seas.
Corn prices are on a modest ascent, currently at $205.32, with a year-over-year rise of 1.2%. Corn prices are on a modest ascent, currently at $205.32, with a year-over-year rise of 1.2%. This gentle rise, marked by a 1.8% increase in the last month, paints a picture of stability in an otherwise volatile agricultural landscape. For Mexico's 1.5 million smallholder farmers, this incremental growth brings hope, but the specter of food price inflation still lurks in the shadows.
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: 2026-02-17 by Jorge Martínez
Key Takeaways
The January 2026 IMSS release shows unit labor costs at 3.12%, indicating wages are outpacing productivity. Following January's formal sector wage data, ULC in manufacturing is rising, with a MoM decrease of 0.32 percentage points. This uptick signifies that wages are growing faster than productivity, which could stir the pot for cost-push inflation pressures down the line. At the 72nd percentile, this trend raises eyebrows about competitiveness and cost management in the sector.
Real wages in the formal sector are showing signs of improvement, with manufacturing workers enjoying a robust increase in purchasing power. With real wage growth at 5.61%, households in manufacturing are experiencing tangible benefits, as their purchasing power is on the rise. This positive shift, marked by a 1.54% MoM increase, suggests that workers are gaining ground against the rising costs of living, providing a much-needed cushion in uncertain economic times.
Across sectors, manufacturing is pulling ahead of retail when it comes to real wage dynamics. Manufacturing is outperforming retail, with real wages rising significantly while retail workers are facing a decline in purchasing power, currently at just 1.52%. This divergence highlights a troubling trend in the retail sector, where real wages have been stagnant, potentially leading to increased financial strain for households reliant on this sector.
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.
Updated: 2026-02-25 by María López
Key Takeaways
Following the latest quarterly GDP release from INEGI, real GDP growth in Mexico stands at a stable 2.31%, unchanged from previous estimates. The nowcast estimate, updated with the new data release, shows that despite the economic policy uncertainty and external challenges, the GDP remains resilient, signaling a steady economic environment. This stability suggests that the fundamentals of the economy are holding firm, even amidst a landscape of mixed signals. Market participants will be keenly watching how future data might influence this trajectory.
Private consumption is estimated at 2.85%, reflecting a solid contribution to overall economic activity. Household spending continues to support growth, indicating that consumer confidence remains relatively intact despite external pressures. This robust consumption trend is a positive signal for future economic dynamics, suggesting that domestic demand may help buffer against global uncertainties.
Exports are projected to grow at 5.21%, indicating a healthy external demand environment. This growth in exports suggests that Mexico’s manufacturing sector is effectively capitalizing on opportunities in key markets, particularly the United States. A strong export performance is crucial for maintaining competitive advantage and fostering economic resilience in the face of potential trade disruptions.
Imports are currently estimated to rise by 5.37%, reflecting robust domestic demand. This increase in imports signals that consumer and business confidence is driving higher demand for goods and services, which is essential for maintaining economic momentum. It also underscores that while external demand is healthy, domestic absorption is equally significant in supporting growth.
Net trade's contribution remains neutral as both imports and exports grow in tandem. This dynamic suggests a balanced trade environment, where the increase in imports does not overshadow export gains. The stability in net trade helps reinforce the overall economic outlook, as both sides of the trade equation are aligned in their growth trajectories.
DFM GDP Nowcasts
| Component | Last Observed | Nowcast | Prev. Nowcast | Revision |
|---|---|---|---|---|
| Real Gross Domestic Product | 1.07% | 2.31% | 2.31% | +0.00 |
| Private Consumption | 1.98% | 2.85% | 2.85% | +0.00 |
| Imports | 17.42% | 5.37% | 5.37% | +0.00 |
| Exports | 5.21% | 5.21% | 5.21% | +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: 2026-03-06 by María López
Key Takeaways
The latest ENOE survey shows unemployment at 2.64%, signaling a continued tight labor market. The March 2026 ENOE survey shows unemployment at 2.64%, remaining at a historically low level around the 1st percentile. This marks a slight decrease of 0.147% from the previous month, reflecting ongoing strength in labor demand despite external uncertainties. With volatility in the unemployment rate near the 86th percentile historically, this stability suggests a labor market that's resilient, but caution is warranted given the backdrop of economic policy uncertainty.
By gender, the employment landscape reveals stark contrasts. Male and female unemployment rates are currently at 3.33% and 3.53%, respectively, both hovering around the 17th percentile. While the male unemployment rate has dipped slightly by 0.0097%, the female unemployment rate saw a marginal decline of 0.00467%. This slight divergence underscores persistent challenges for women in the job market, hinting at the need for targeted policies to boost female employment.
The share of informal workers is on the rise, signaling potential vulnerabilities in the labor market. The share of informal employment now stands at 55.6%, reflecting a modest increase of 0.0141% from last month. This trend contrasts with the overall unemployment stability and suggests an uptick in workers seeking less secure, informal jobs amid economic uncertainties. The rising informality could pose risks to long-term economic stability, as these jobs typically lack benefits and protections.
DFM Employment Nowcasts
| Indicator | Last Obs. (Q4 2025) | Nowcast (Q4 2025) | Prev. Nowcast | Revision |
|---|---|---|---|---|
| Unemployment Rate | 2.58% | 2.64% | — | — |
| Underemployment Rate | 10.42% | 12.32% | — | — |
| Male Unemployment | 2.50% | 3.33% | — | — |
| Female Unemployment | 2.61% | 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 15 evaluation windows using the Dynamic Factor Model (DFM). Out-of-sample backtest over 15 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 0.33 vs 0.11 naive, n=12); Underemployment (RMSE 1.25 vs 0.49 naive, n=10); Male Unemployment (RMSE 0.27 vs 0.25 naive, n=10); Female Unemployment (RMSE 0.27 vs 0.27 naive, +0% improvement, n=10).
Updated: 2026-02-12 by Jorge Martínez
Key Takeaways
INEGI's Q4 2025 productivity release shows secondary sector output at 102, continuing its recent upward trend. The latest INEGI productivity data for Q4 2025, released in December, indicates that the secondary sector productivity index is at 102, reflecting a 3-month upward streak. This growth is largely driven by construction, which has soared to an impressive 106, while mining continues to lag behind at a mere 89.8. Notably, this growth seems to be more concentrated in construction rather than being broad-based across all industries, hinting that while some sectors are thriving, others are still digging themselves out of a hole.
Across the PCA indices, manufacturing composites show a concerning divergence in performance. The composite indices reveal a mixed bag: while productivity is at a modest 0.281, sales have been robust, rising to 0.61, suggesting that demand is still alive and kicking. However, labor demand is on a downward trajectory at -1.49, raising eyebrows about the sustainability of this growth. This divergence between sales and labor demand could signal future challenges—because let’s face it, if the demand is there but the workforce isn’t, we might just be throwing a party with no one to serve the drinks.
Within manufacturing, the top-performing subsectors shine a spotlight on food production, while transport equipment remains in the dumps. The top-performing subsectors include food, which is cruising at 111, a solid indicator of consumer demand, while transport equipment languishes at a dismal 82, reflecting ongoing struggles in that area. Given that food accounts for 18.86% of total manufacturing, its strong performance is undoubtedly propping up the overall figures. Meanwhile, the stark contrast with transport equipment underscores the uneven recovery within the manufacturing landscape—it's like a feast where some are dining lavishly while others are still waiting for their plates.
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.
Updated: 2026-02-06 by Jorge Martínez
Key Takeaways
The January 2026 consumer confidence survey shows the general index at 1.15, reflecting a slight dip in sentiment as worries about rule of law and security continue to cast a long shadow. INEGI's latest January release reveals confidence at the 87th percentile, indicating that while consumers are generally optimistic, they are feeling the pinch as the index fell by 0.123 points from the previous month. The most striking divergence comes from the durables-specific index, which remains a robust 2.11 and suggests that consumers are still keen to splurge on big-ticket items, even as confidence in general stability wanes. This discrepancy hints at a complex consumer psyche that’s eager to buy but wary of the broader economic landscape.
Consumer confidence surveys gauge how secure households feel about their income and the economy. The general confidence index reflects overall sentiment, while sector-specific measures — such as willingness to purchase durables or housing — reveal spending appetite in categories most sensitive to interest rates. Stronger confidence supports consumption and can add inflationary pressure; weaker confidence signals caution and potential slack. For monetary policy, these indicators help anticipate whether rate moves are restraining or stimulating household demand.
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Updated: 2026-03-04 by Ignacio Crane
Key Takeaways
The February 2026 SPF survey reveals a modest decline in economic sentiment. The February 2026 SPF survey shows the aggregate Concern Index at 2.82, placing it around the 62nd percentile. This marks a slight decrease of 0.01 from the previous month, reflecting a continued trend of concern that has now persisted for three months. The implications of this decline suggest that while sentiment remains relatively elevated, there is a cautious outlook among economists regarding the immediate economic landscape.
The evolving landscape of economic constraints highlights significant concerns for policymakers. Economists have identified public insecurity as the foremost constraint, comprising 11.23% of the responses, followed closely by US trade policy at 7.64% and a lack of structural change at 4.40%. Notably, public insecurity has increased by 1.16% month-over-month, underscoring the growing anxiety surrounding safety and stability. Such persistent concerns signal potential challenges for both domestic and foreign investment confidence.
Recession concerns are currently perceived to be moderate among economists. The perceived probability of recession stands at 25.0% for the current quarter, positioning it in the 75th percentile historically, suggesting elevated concern relative to past norms. This moderate level reflects a cautious sentiment, as expectations for the next quarter indicate a slight decline to 20.0%. These figures may indicate a stabilizing economic outlook but also highlight the need for vigilance in monitoring underlying risks.
Current FX expectations indicate that forecasters see the peso as overvalued against the dollar. According to forecasters, the current month's misalignment shows the peso perceived as overvalued by 0.157, a signal of potential weakness in the currency relative to expectations. This sentiment persists across shorter-term forecasts, suggesting a consistent view of the peso's valuation over the coming months. Such perceptions could have implications for trade and investment flows, further complicating the economic landscape.
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: 2026-03-06 by María López
Key Takeaways
Mexican equity markets as of March 6, 2026 show excess returns at 0.0254, reflecting a slight decrease in recent volatility trends. With market data through December 2025 and updated indices, realized volatility is clocking in at 0.0077, indicating a modest decline over the past month. Despite this, the illiquidity measure (Amihud) has significantly dropped to 103.63, suggesting a tightening market environment. The latest shifts signal that while markets are stabilizing overall, the backdrop of economic policy uncertainty continues to create ripples that could impact investor confidence.
The decomposition shows that volatility has been primarily driven by persistent contributors such as US policy shocks and ongoing economic uncertainty. Recent fluctuations highlight a notable rise in volatility from external economic shocks, while liquidity measures reflect a tightening market. This juxtaposition underscores that though the market may appear calm, underlying pressures are building, and any sudden changes in policy could spark significant reactions.
Investor sentiment remains fragile, with heightened policy uncertainty reflected in current EPU levels. Amid rising discussions around public security and economic policy, sentiment indicators are showing increased caution. The AAII and NAAIM metrics indicate that market participants are bracing for potential shifts, as concerns about the rule of law and security challenges loom large. This growing uncertainty could further complicate Banxico's decision-making as they weigh immediate economic pressures against longer-term stability.
Volatility Measures
| Measure | Feb 2026 | Mar 2026 | Δ | Top Driver |
|---|---|---|---|---|
| Excess Return | 0.2614 | -1.1095 | -1.3709 | US Policy Shocks (+0.139) |
| Realized Volatility | 0.0096 | 0.0194 | +0.0098 | Investor Sentiment (-0.001) |
| Illiquidity (Amihud) | 88.4113 | 240.5602 | +152.1489 | Investor Sentiment (-18.364) |
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: 2026-03-06 by María López
Key Takeaways
Banxico's March 2026 credit release shows money market spreads at a narrowing 0.218, signaling a tightening trend that could impact borrowing costs. Following the latest March lending data, rate premia have tightened significantly. The TIIE 28-day rate is now at 0.31%, and the 91-day at 0.35%, both revised lower, while bank funding stands at just 0.01%. This narrowing trend, with spreads down by -0.107 in the last month, indicates potential shifts in the lending landscape, pushing funding costs closer to policy rates and suggesting a more cautious approach from lenders amid economic uncertainty.
Household mortgage rates remain a concern with an average total annual cost (CAT) of 13.9%, straining affordability for borrowers. The total annual cost of mortgages shows a range from 11.1% to 28.2%, reflecting significant variability in borrowing costs. With the policy rate influencing these figures, the implications for affordability are stark, especially given the current economic climate, making it harder for many households to enter the housing market.
Debt issuance patterns show a significant reliance on fixed-rate financing, as firms adjust their strategies amid uncertain economic conditions. Corporate financing is increasingly tilted towards fixed-rate debt, accounting for 18.31% of GDP, while variable-rate options remain at lower levels. This shift signals a cautious approach from firms aiming to hedge against potential interest rate volatility, underscoring the ongoing challenges in the broader economic landscape.
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.
