September 23, 2019 / 1:07 PM / 2 months ago

UPDATE 1-Mexican retail sales flat in July, making weak start to third quarter

(Updates with context, economist comment)

MEXICO CITY, Sept 23 (Reuters) - Mexican retail sales were unchanged in July compared to June when adjusted for seasonal swings, pointing to a weak start to private consumption in the third quarter, data from the national statistics agency showed on Monday.

Mexico narrowly avoided slipping into recession in the first half of 2019, and early indicators suggest economic activity in the third quarter is struggling to gain traction.

Consumer spending has provided support to the economy, but July’s flat sales figures followed a month-on-month fall of 0.6% in June, a decline one tenth of a percentage point steeper than initially reported, revised data from the agency showed.

Goldman Sachs economist Alberto Ramos said in a research note that tight monetary policy, tough credit standards and weakening job growth would likely weigh on private consumption.

On the plus side, real wage gains and higher minimum wage increases, slowing inflation, fiscal transfers to households with a high tendency to consume and a competitive currency should help cushion the effects of a slowdown, he added.

Compared to the same month a year earlier, retail sales increased by 2.1% in July, the data showed. (Writing by Dave Graham )

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