Mexico's April retail sales pointing at downward convergence of consumption

Mexico's retail sales growth was quite impressive in Q1 and since it was likely supported by the lower unemployment rate and a sharp decline in inflation - factors that have continued in Q2 - retail sales growth is expected to stay relatively strong in Q2. 

However, April retail sales were weaker than expected and it actually declined sequentially meaning consumption started on a weaker note in Q2.

In terms of the trend, retail sales bottomed out in 2013 and have improved modestly since then. Although its correlation with the overall consumption growth is weak (more recently consumption seemed to be lagging sales growth), a lower retail sales number implies that consumption is more likely to converge towards the lower overall growth number in Q2.