* Adjusted consumer confidence rises to 96.8 in October
* Outlook on major purchases improves after inflation spike
MEXICO CITY Nov 5 Mexican consumer confidence
rebounded in October after slumping for two months, supported by
cooler inflation and falling unemployment, official data showed
The seasonally adjusted index rose to 96.8 in October
compared to an upwardly revised 94.1 in September,
according to data from the national statistics agency.
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
"This data implies a recovery in consumption, a boost," said
Sergio Martin, an economist at HSBC in Mexico City, who said
there were still no signs of significant pressure on inflation
September's index had originally been reported at a
nine-month low, but the revision took it to its lowest since
March. Confidence fell in August as well.
All the index's components rose, with a sharp increase in
the current outlook for the economy compared to a year ago and a
rebound in the willingness to buy big-ticket durable goods.
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
The unadjusted index rose to 94.9 in October,
and was up compared to 94.0 in September, its lowest since
Improving employment and solid manufacturing growth could
help support sentiment if inflation continues to cool.
Mexico's jobless rate fell to its lowest in nearly four
years in September while the pace of growth in Mexico's
manufacturing sector rebounded in October after three months of
Still, a U.S. economic slowdown has dragged on Mexico, which
sends nearly 80 percent of its exports to its northern neighbor.
The finance ministry said last week that the economy likely
cooled to a 3.3 percent growth rate in the third quarter,
year-over-year, compared to a 4.1 percent rate in the second
quarter versus the same period last year.
The central bank said last month that it could tighten
borrowing costs if inflation does not abate, and interest rate
swaps reflect bets on a 25-basis-point hike next year to
Mexico's benchmark interest rate of 4.50 percent..