Key facts
- Mexico's annual inflation slowed to 3.94% in May.
- Mexico's central bank target inflation is 3% +/- 1 percentage point.
- Philippines inflation decelerated to 6.8% year-over-year in May.
- Philippines inflation was 7.2% in April.
- UK consumer spending grew 0.8% annually in May.
- UK consumer spending declined 0.1% annually in April.
- Brazil's unemployment rate fell to 5.8% in April.
- Brazil's average real wages rose 8.9% year-over-year.
- Mexico's public sector primary surplus grew to MXN 77.1bn in April.
- Mexico's general deficit narrowed to MXN 37.1bn in April.
Inflation rates presented a varied picture across different economies in May. Mexico's annual inflation rate decelerated to 3.94%, marking the second consecutive month of decline and returning to the central bank's target range of 3% +/- 1 percentage point. Monthly consumer prices in Mexico fell by 0.21%, and core inflation eased to 4.19%. Concurrently, Mexico's central bank believes its current monetary policy rate is in neutral territory, though Governor Rodríguez noted uncertainty regarding the exact position of this neutral band. Officials also observed no discernible second-order economic effects from a recent IEPS tax hike. Mexico's public sector also recorded an increased primary surplus of MXN 77.1 billion in April, with a narrowed general deficit of MXN 37.1 billion, attributed to reduced public spending.
In the Philippines, consumer price index inflation decelerated to 6.8% year-over-year in May. This figure is below analyst forecasts and the central bank's expectations, representing a slowdown from 7.2% in April. The deceleration was primarily driven by lower price growth in transport, food, non-alcoholic beverages, and housing costs. Despite this slowdown, the Bangko Sentral ng Pilipinas intends to proceed with a rate hike.
Brazil's economic landscape shows demand-driven inflationary pressures, according to the central bank governor. These pressures are seen as inconsistent with the bank's 3% inflation target, fueled by resilient economic conditions including low unemployment and high income. Brazil's unemployment rate fell to 5.8% in April, down from 6.1% in March and below the consensus estimate of 5.9%. Average real wages reached a record high of BRL 3,732, an 8.9% year-over-year increase.
In the United Kingdom, consumer spending rose by 0.8% annually in May, recovering from a 0.1% decline in April. This increase was partly attributed to hot weather boosting sales of clothing and food, although spending on travel continued to decrease.