Mexico Inflation Slows Sharply in Early November

MEXICO CITY--Mexican inflation fell back toward the central bank's target in early November as lower produce prices and discounts related to an annual shopping promotional event largely offset a seasonal jump in electricity rates.

The consumer price index rose 0.04% in the first two weeks of the month from the end of October, the National Statistics Institute said Tuesday. It was the smallest increase on record for the period and pushed the 12-month inflation rate down to 3.43% from 4.09% at the end of October.

The decline in the annual rate came after the central bank on Nov. 12 paused after 11 consecutive interest-rate cuts, saying it wanted to make sure than inflation starts returning to its 3% target.

"Inflation estimates for the first half of November have rekindled hopes that the central bank can resume cutting rates as early as its Dec. 17 meeting," the Vector Casa de Bolsa brokerage said in a note ahead of the inflation report. It added that reductions in goods prices related to the Buen Fin shopping event would be temporary.

In an effort to reduce crowding at stores and malls because of the coronavirus crisis, the government and merchants this year extended the event -- Mexico's version of Black Friday -- to run Nov. 8-20, when usually it occurs over four days in the second half of the month.

Core goods prices excluding food, which are among the most susceptible to discounts, fell 0.69% in the first half of the month. Overall core CPI, which excludes agricultural products and energy, fell 0.11% in the two-week period, pushing the annual rate down to 3.68% from 3.98% at the end of October.

In non-core categories, a drop in fresh produce prices and lower gasoline prices helped offset the impact of the 23% rise in electricity rates as seasonal subsidies ended for northern cities.

Write to Anthony Harrup at anthony.harrup@wsj.com

Corrections & Amplifications

This article was corrected at 1340 GMT because the original incorrectly said the index rose 0.04% from the end of September. The consumer price index rose 0.04% from the end of October.

The consumer price index rose 0.04% from the end of October. "Mexico Inflation Slows Sharply in Early November," at 0758 ET, incorrectly said the index rose 0.04% from the end of September.

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