Mexico: October Economy Grows for Second Straight Month PDF Print E-mail
Thursday, 14 January 2010 14:25
MEXICO CITY, Jan 14 (Reuters) - An industrial rebound helped Mexico's economy grow for a second straight month in October, but weakness in consumer spending kept a dampener on its recovery from deep recession.

Economic output rose 0.1 percent in October from a month earlier, although it was still 5.29 percent lower than a year earlier, the national statistics agency said on Thursday.

Mexico is inching out of its most severe recession since the 1930s as U.S. demand for its exports gradually recovers.

But after contracting an estimated 7 percent in 2009, the economy is expected to grow no more than around 4 percent in 2010 as persistently high unemployment and a tax increase weigh on consumer spending power.

While the industrial sector rose 5.31 percent in October, the service sector contracted 0.64 percent, according to Thursday's data.

"Our clients just don't want to spend," said Lety Venegas, who manages four hair salons in Mexico City.

Even though the salons' revenues appear to have hit bottom in mid-2009, Venegas forecasts that sales this month will be one-quarter less than they were a year earlier. Two of the four salons are still several months behind on their rent.

Unemployment appears to have peaked in September but remains near its highest level in 13 years. Consumer confidence is close to its lowest since the government statisticians started measuring it in 2000. (Reporting by Jason Lange; Editing by Theodore d'Afflisio)



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Last Updated on Thursday, 14 January 2010 14:27
 

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