Watching indicators in the US that would signal an improvement in consumer demand
We’re closely watching indicators in the US that would signal an improvement in consumer demand. Mexico’s efforts to tackle the effects of the ongoing global financial crisis can help mitigate the impact but the recovery will come from an improved US economy.
“Mexico’s fate is so closely linked to the United States that they can’t get out of the recession on their own,” said Eugenio Aleman, a Latin America economist from Wells Fargo Bank. “They are trying to smooth over the problems. The central bank has loosened policy. But there is not much the government can do.”
Looking for signs of recovery…
A report last Friday confirmed consumer confidence in the US tumbled more than expected in June, to a 28-year low. The report by the Reuters/University of Michigan said the confidence index fell to 56.7 from May’s 59.8. The figure is the lowest since the record low of 51.7 in May 1980.
Chicago Federal Reserve Bank President Charles Evans said the U.S. unemployment rate could get closer to 10 percent instead of 9.5 percent. He added that the jobless rate could peak later this year — earlier than a mid-2010 peak previously expected. This could signal a deeper fall but an earlier recovery.
Potential risks that can derail a recovery…
A current point of concern for many is soaring commodity prices. Food prices in the US have jumped 5% the past 12 months, with bakery products (up 10.5%), dairy (+11%) and oils (+12.8%) leading the way. Energy prices have skyrocketed. Fuel oil and other fuels have soared 50.7% in the past 12 months.
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Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com
About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com
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