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WRAPUP 1-Mexico inflation cools more than expected in early June
June 24, 2013 / 1:41 PM / 4 years ago

WRAPUP 1-Mexico inflation cools more than expected in early June

* Headline inflation eases to 4.24 percent vs poll 4.41
percent
    * Consumer prices dip 0.05 percent in early June
    * Jobless rate falls in May despite slowing growth

    MEXICO CITY, June 24 (Reuters) - Mexican inflation cooled in
early June as fresh food prices fell although price gains are
set to remain above the central bank's 4 percent ceiling for the
fourth straight month.
    Inflation in the 12 months to mid-June eased to 4.24 percent
from 4.63 percent in the year through May, below the 4.41
percent expected in a Reuters poll, data released on Monday
showed.
    The central bank, which targets inflation of 3 percent, had
expected inflation to start to turn down this month and keep
trending down for the rest of the year, partly due to weak
growth in Latin America's number two economy.
    But no further interest rate cuts are expected after a
surprise decrease in March to the current 4 percent, with
policymakers watching for the impact of an expected easing in
stimulus from the U.S. Federal Reserve, which may weaken the
peso further and push up import prices. 
 
  
 
    Mexico's peso has fallen almost 4 percent since Fed Chairman
Ben Bernanke said policymakers might tone down bond purchases
later this year and stop them completely by mid-2014, if the
U.S. economy performs as expected, and Mexican bond prices have
jumped.
    Mexico is closely linked to the United States and growth is
slowing in the first part of this year, although officials
expect a recovery in the second half of 2013.
    The national statistics agency said consumer prices fell
0.05 percent in the month, compared to expectations for a 0.11
percent rise.
    Core consumer prices, which strip out some volatile food and
energy prices, rose 0.07 percent, compared to forecasts for a
rise of 0.12 percent.
    Separate figures showed that unemployment eased in May
despite the weakness in growth, with the headline jobless rate
falling back to 4.93 percent, from 5.04 percent in April.

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