The Day at a Glance | October 9 2023

*Inflation in Mexico continued to decrease during September and set at a 31-month low.

*Israel formally declared war on Hamas this Sunday after the Islamic group launched a surprise attack on Saturday. So far, more than 700 deaths and thousands of injuries have been reported. Hamas also claims to have 100 prisoners.

*In the United States, the House of Representatives still doesn’t have leadership. The two candidates for the position are the majority leader, Steve Scalise of Louisiana, and Jim Jordan of Ohio, who will be delivering their speeches to their fellow Republican party members today.

*Also in the United States, over 250,000 automotive sector workers remain on strike with no possible agreement in sight.

Economic environment

Consumer inflation slowed down for the eighth consecutive month and set at 4.45% y/y in September, its lowest reading since February 2021. This reading was slightly lower than the 4.47% y/y forecasted by the market and down from a previous 4.64% y/y figure, marking the eighth consecutive month of declining readings. On a monthly basis, the rate set at 0.44%, slowing its pace from the 0.55% m/m logged in August, and even below the 0.54% m/m average (2000-2022) for September. By components, core inflation remained in line with market estimates at 0.36% m/m, composed of a 0.31% m/m increase in goods and 0.35% m/m hike in services; education stood out at 3.15% m/m within the services category. On the other hand, the non-core component slowed its pace of growth to 0.7% m/m from 1.74% m/m in August, thanks to a significant drop in fruits and vegetables (1.02% m/m vs. 4.0% m/m prev.), and to a lesser extent, energy prices (0.74% m/m vs 1.67% m/m prev.). With this, on an annual basis, non-core inflation continued to record a low annual change (0.6%), primarily due to negative readings in the energy sector, which fell year-on-year for the seventh consecutive month at a -4.61% rate, while core inflation recorded a 5.76% y/y figure, breaking the 6% barrier for the first time since December 2021. While September´s figures continue to be positive, we must remain mindful of the risks that could limit their decline in the coming months, such as agricultural prices, which continue to move at high monthly and annual rates, now accompanied by greater momentum in livestock prices, as well as services on the core side, which still show no progress (5.23% y/y).