Mexico (America) fact of the day

Mexican non-oil exports to USA in December (y/y): -4.5%. Excluding autos: -8.7%.

That is from Genevieve Signoret, via this source.

It’s funny how these numbers seem to indicate someone is starting to enter a recession.  Who might that be?  Maybe it’s just noise, I don’t see any other mediocre economic reports wandering around these parts…  Or maybe it’s Mexico that’s the problem


'Who might that be?'

Almost as if the idea of a state wracked by growing violence and corruption would not show any aspects of such problems in other spheres. Or that additionally, Mexican exports that are not recorded have been growing as part of Mexico's continuing problems with drug cartel violence and power. Such an opaque situation for an economist, it seems.

Oddly, though the statistics are not readily available, it is fairly certain that Syrian exports to Turkey are also down. One hopes that only the occasional economist is puzzled by such things.

Woulda been a lot smarter, more relevant, and less douchy to just type "First".

Well said by prior_test....msgkings, how's that food allergy coming? Still an ice hockey fan in LA? Loser.

Gretzky left Edmonton for it. "No, it's 'Hockney', with an 'N'"

The Great Gretzky sold his soul for $$$. Also, though not being a hockney fan, I would not be surprised if the referees gave him breaks that allowed him to score easily, not unlike Mike Jordan in b-ball.

We now can add sports to the enormously long list of things Ray Lopez knows nothing about

So far the rule "any comment that Ray Lopez attacks must be correct" has not failed me.

You read his comments?

As crappy as the violence is, it does seem to be contained to a few regions/sectors of Mexico. The drug war didn't slow down Mexico's imports in any other year and in fact they were growing quite a lot. Suggests there are other factors in the decline.

Isn't Mexico dramatically improved in that area compared to the last 10 years or so?

Almost as if the idea of a state wracked by growing violence and corruption

Tranparency International rank orders foreign countries from survey research. Mexico's never scored well. Mexico's stock fell from 2006 to 2010, but not in the years since. The homicide rate also grew worse during that four year interval. Mexican homicide rates are Latin American normal. Your endemic social problems are unlikely to cause year to year flux in your production and trade statistics.

If I understand right and that is a single month versus the same month of the previous year, then of course you can't tell from a single month if it's meaningful or just noise. If it were full year 15 vs full year 14 (true year-on-year) that would be meaningful. I just looked at some data for Mexican exports ex-HS27 (mineral fuels and closely related products, broader than oil), which only went up to October. By single months the numbers hop around, but they are on average a lot better in Jan-June than July-Oct.

This may or may not be part of the early warnings, but the signs of coming recession are beginning to show up everywhere. Sluggish global growth impacts US exports, a main economic driver in recent decades. Low interest retards the formation of private capital for investment, important for domestic growth. And the other main business sign, construction, isn't setting the world on fire, either. Consumers sense these outer signs and don't spend freely, another of the domestic keys.

This is very possible, all the talk of global recession could become a self-fulfilling prophecy. No one thought a recession was imminent in early 2008 either. That said, recessions happen, there will be another, and then there will be a recovery afterwards.

From the Twitter link:
Mexican non-oil non-auto exports to countries other than USA in December -13.3% y/y. <= PLEASE NOTE.

Am I missing something?

Do economists now use "mediocre" in the same way as sports commentators, to mean "lousy"?

If anyone cares about the data, the export data from Jan 1991 to Dec 2015. Dot-Com bubble and Great Recession are pretty visible: Looking at the Jan 2009 -Dec 2015 period "something" is happening that exports go down in December and January. Original data comes from here:

Looking at the data the largest fall is in mining exports, no surprise since commodities have gone down. However, mining exports are just a third of agricultural exports and 2% of manufacturing exports. There's also a -9.87% "fall" of non-automobile manufacturing exports from Dec 2014 to Dec 2015. But, Dec 2014 was up 14.75% from Dec 2013. It seems the surprise here is not Dec 2015 but Dec 2014.

What happened in Dec 2014 that non-automobile manufacturing exports reached an all-time high? And why people make conclusions based on the all-time high?

It's noise Tyler:

The December non-auto manufacturing exports are above the years average but because of weird base effects last year when they went up to 21bn in Dec the y-o-y number looks big.

Thanks. That's for whole world not just to US but up to date. It confirms what I was saying: the December # looks like noise, but nonetheless there is an obvious weakening trend in the 2nd half of '15 relative to the 1st.

The Mexican regime is unreformable.

Not to deny his flaws, but Pena Nieto has enacted some pretty significant reforms.

Easy to imagine on the outside, it is actually fairly remarkable the reform of the last 60 years.

The political order is quite dissimilar to what it was 50 years ago (competitive politics replacing an impregnable machine) and most state enterprises were liquidated or sold after 1982.

I think there has been considerable reform since 1986. Mexico is a very different country now.

Carlos Salinas inaugurated free market reforms, and Mexico has never looked back. But it was still politically controlled by the PRI and very corrupt.

Ernest Zedillo cemented the economic reforms and allowed political reforms to happen. Prior to Zedillo, economic crisis always hit after the elections because the PRI ramped up spending to ensure elections and then cut back. Since 1998 this political risk has been eliminated. Mexico's ups and downs are based on normal economic factors. And of course, he refused to cheat the next elections so that for the first time a non-PRI candidate won the Presidency. Mexico was still corrupt, but some of the worse examples were cut.

Vicente Fox and Feilpe Calderon followed and were both not from the PRI. Neither was able to make substantial headway in further economic reforms, but cemented the political reforms and ensured the PRI's dinosaurs could not reverse the democratic gains.

Pena Nieto was able to push through several significant reforms, and because he was from the reformist faction within the PRI has continued the democratization of the past two decades.

Mexico still has lots of corruption and high crime, but it is very different from what it was like in the 1970s and 1980s. It has a competitive export economy and moving up the value adding chain. After having China take some of its role as a low cost producer, it successfully made enough reforms to reverse that. It has several regions behind its economic growth. It is not just a one trick pony. Future progress is not inevitable, but I think its prospects look good. It still needs to achieve several milestones before it completes its transformation however.

The sales and liquidations of state enterprises began under Miguel de la Madrid. Also, PRI's political monopoly began to unravel then as well.

I would guess the sargassum seaweed in Cancun and warm American winter are a part of the story here.

Where's Sailer to praise how good, WASPy white oil and cars are beating out those cheap swarthy Latin oil and cars?

I don't think he has any problem with Mexicans in Mexico

Sailer finds blacks amusing, Puerto Ricans chronic underperformers, and Mexicans unambitious and somewhat loutish (litter in parks, &c).

Why do Sailer trolls make the most dull, inane comments? Their comments are some of the lamest attempts at satire that I've ever seen.

Why are Sailer fanboys so touchy?

Because we're lean and hungry, and don't have the easy smugness of being in the mainstream. Challengers are more feisty than incumbents.

That's not what 'touchy' means.

priced in USD? peso weakened significantly vs USD. maybe trade elasticity laggy, incompletely elastic

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