UPDATE 2-Mexico consumer confidence rises for second month

Tue Dec 4, 2012 9:57am EST

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* Consumer confidence up 0.13 percent in November

* Economists welcome sign on domestic demand

* Outlook perhaps boosted by weekend sales

MEXICO CITY, Dec 4 (Reuters) - Mexican consumer confidence rose for the second month in a row in November amid increased optimism about the outlook for Latin America's No. 2 economy, according to data released on Tuesday.

The seasonally adjusted index rose to 97.0 in November from 96.8 in October, the national statistics agency said, reaching its highest level since May.

Mexico has so far weathered a global downturn better than many economies, buoyed by U.S. demand for its exports. But consumer confidence still lags behind levels seen before the 2008/2009 recession.

Two of the index's five components rose, with increases in the willingness to buy big-ticket durable goods and a more positive view about the outlook for the economy in 12 months.

"That's quite promising because there have been signs in the services sector that activity had slowed a bit as slower growth filtered through from the U.S.," said Capital Markets economist David Rees, adding that domestic demand could help pick up the slack from a weaker external sector.

He also pointed to the fiscal and energy reform plans of Mexico's new government, which took power last weekend and hopes to spur growth of as much as 6 percent a year.

"The election of (President) Enrique Pena Nieto and him taking office would be deemed positive for the economy," Rees said.

Confidence may also have been bolstered by strong sales during Mexico's "Buen Fin," a three-day campaign in November to boost consumer spending that is modeled on the United States' "Black Friday."

Retail sales during the campaign at stores that have been open for at least a year rose nearly 30 percent over last year, on strong sales of general merchandise, clothes and shoes, a retailers' association said last month.

A spike in annual inflation to a 2-1/2-year high of 4.77 percent in September had cut into the appetite for major goods purchases, but the pace of consumer price increases cooled in October, supporting spending.

The unadjusted confidence index fell slightly to 94.2 in November, from 94.9 in October.

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