Mexico consumer confidence reaches highest level on record

Mexican consumer confidence rose in February for a third consecutive month, hitting its highest level on record, data from the national statistics agency showed on Tuesday.

Adjusted for seasonal swings, Mexico’s consumer confidence index rose to 119.9 in February from 113.2 in January, continuing the upward trajectory it has taken since President Andres Manuel Lopez Obrador took office in December.

The data offers some respite for the leftist Lopez Obrador after a spate of recent warnings from analysts and economists over the outlook for Latin America’s no. 2 economy.

Lopez Obrador has vowed to tackle poverty, reduce inequality and improve wages for the bulk of Mexican society.

His election in July also triggered a significant jump in the consumer confidence index.

In December, the country’s wage commission agreed to raise the daily minimum wage of just over $4 by 16 percent, the biggest percentage raise since 1996.

Still, Goldman Sachs economist Alberto Ramos noted the bright optimism among consumers was not shared by companies.

“Business sentiment has been more subdued as producers have been apprehensive with regards to policy direction and overall sector-level policies,” Ramos said in a note to clients.

Responding to warnings by ratings agencies that Mexico was running the risk of a downgrade to its credit rating, Lopez Obrador on Tuesday said the agencies were punishing the country for the “neo-liberal” policies of previous administrations, a favorite rhetorical target of the president.

The previous peak for the adjusted consumer confidence index was 116.1 in August 2001, a few months after data for the index began being registered by the statistics agency.

World Bank data shows that Mexico suffered a mild recession that year after the end of the dot-com boom.

The non-adjusted confidence index rose in February by nearly five points from the previous month to 116.8. That took the unadjusted index to its highest level since August 2001.

Reporting by Dave Graham; Editing by Bernadette Baum and Bill Berkrot