The Day at a Glance | March 9 2023

*After the rebound in January, inflation in Mexico resumed its downtrend in February and surprised positively.

*Both consumer inflation and producer inflation surprised to lower levels in China with annual changes of 1.0% (vs 1.9%e) and -1.4% (vs -1.3%e), respectively.

*In the US, registered vacancy figures (JOLTS) in January were 10.8 million, superior to 10.5 estimated, but showing a moderation from the 11 million registered in December.

*US weekly jobless new claims increased to 211k in the week that ended on March 4th, since a previous reading of 190k. 

Economic environment

Inflation in Mexico decelerated in February with a 7.62% annual change, below the previous reading of 7.91%, and in line with the 7.68% consensus. At a monthly rate, inflation registered a 0.56% growth, which remains relatively high for February, but it is less than the 0.68% of January and the 0.62% estimated. Thus, the moderation in the trajectory of inflation was supported by both the core component and the non-core component with 0.61% m/m and 0.40% m/m. Even more, in the core components, we highlight the goods sub-index which had shown the strongest upward pressures and now registered a 0.65% change in February, thanks to a noticeably lower reading (0.68% vs 1.25% in January) in the category of food, beverages, and tobacco. This, along with a lower reading in the housing category (0.35% m/m), totally offset the increases in other underlying components. On the other side, the moderation of the non-core monthly reading is mainly explained by a -3.02% m/m fall in fruit and vegetable prices, which offset the increases in livestock (+2.37% m/m) and energy (+0.73%). In accordance with the previous establishments, the core annual reading was 8.29%, 0.06 pp below the estimated and the lowest level since September 2022; while the non-core was located at 5.62% y/y, the lowest change in two years. All in all, February data is encouraging thanks to general inflation retaking its downward trend, supported by lower variations in the goods prices, an entry that had shown stickiness, but we shall wait to watch the evolution in the next months to realize if the trend is solid.