Mexican consumers: not too confident.

Mexico's consumer confidence index declined somewhat from 104.3 points in January 2007 to 103.6 points in February 2007, a March 6, 2007 Reuters dispatch said. The Bank of Mexico (Banixco), the country's central bank, separately reported the December 2006 consumer confidence index at 110.1 points. And a Dow Jones story from March 21, 2007 said that retail sales in January 2007 increased 0.48 percent from December 2006, and were up 2.3 percent from January 2006.

So there appears to be a disconnect between consumer confidence in Mexico and what consumers are doing in the stores-i.e., spending. Confidence declined 5.3 percent between December 2007 and January 2007, and yet retail sales increased 0.48 percent. The explanation may lie in the fact that sales promising discounts at retail in January 2007 prompted the increase in store sales value.

Most of the sub indexes that make up the overall consumer confidence index declined in January 2007 and picked up again in February 2007. Households were asked about their current economic situation in the monthly confidence survey conducted by Mexico's national statistics agency, Instituto Nacional de Estadistica, Geografia e Informatica (Inegi). In December 2006, responses set the sub index at 104 points. In January 2007 the sub index dropped to 101.1 points and then recovered slightly to 101.6 points in February 2007.

A similar pattern prevailed when Inegi asked their respondents whether or not now was a good time to buy durables. In December 2006 the durables sub index was 114.5, in January 2007, 103.2, and in February 2007 106.1. These unsteady confidence results indicate some possible problems ahead for consumer spending and retail sales.