The Day at a Glance | January 5 2023

*Consumer confidence increased in December and reached a 6-month high.

*The US labor market keeps showing signs of strength.

*The US manufacturing ISM continued decreasing in December; it set at 48.2 points.

*US trade balance logged a deficit worth -61.6 billion dollars in November, its lowest figure since June of 2020.

*Composite PMI´s and services indexes in China (Caixin) logged monthly progress in December, although they remained below the 50 point threshold for a fourth consecutive month (48.3 and 48 points, respectively). 

*Inflation for producers continued becoming more moderate in the Eurozone during December: -0.9% monthly, 27.1% annual.

*Banxico will make its December 15th meeting minutes known at 1:00pm Mexico City time.

Economic environment

Mexico´s Consumer Confidence Index increased 0.6 points in December and set at 42.5 points.Monthly progress was boosted by improvements in all five of the components that make up the index. The component that measures households´ 12-month economic expectations led the way and set at 55.3 points (+0.6 monthly); while the expectation of the country´s current economic situation logged the largest improvement (+1.1) and set at 46.7 points. However, the component that measures the likelihood of households purchasing durable goods remained low (+0.3). Although the index and its components showed significant improvement with respect to what had been recorded during summer, they remained below their yearly comparative figures. Lastly, it´s worth pointing out that the improvement in both the current situation compared to a year ago along with expectations for the next 12 months, have not reflected a proportional improvement in household purchasing possibilities. 

Job supply in the US surprised to the upside despite decreasing on a monthly basis. December´s number of vacancies set at 10.4 million (M), exceeding the 10M estimated by the consensus (vs 10.5M prev.). The current level is way above the pre-pandemic average (2017-2019) – 6.7M – and the ratio of vacant jobs per unemployed person is 1.7, also greater than the 1.2 figure logged prior to the pandemic. Additionally, the ADP job report showed that 235 thousand jobs were created in November, which exceeded an expected 150 thousand (127 thousand prev.). Lastly, unemployment claims decreased to 204 thousand on the week ending December 31^st. Overall, the labor market´s recent figures should give the FED arguments to maintain an astringent stance in its next meeting.