Mexico Moderate 1H Aug HeadlineCore Prints; Sticky Services (Ramos)

Economics Research 24 August 2026 | 9:21AM EDT

Mexico: Moderate 1H Aug Headline/Core Prints; Sticky Services (Ramos)

Bottom Line: Headline inflation printed at 0.10% in 1H Aug (slightly below consensus), Alberto Ramos | and core at 0.08% (5bp below consensus). Fundamental core rose a minor 0.05% (3.45% Goldman Sachs & Co. LLC yoy). Inflation in Aug benefited from low prints in core goods ex-food, declining energy prices, and flattish perishable food prices partially offset by high prints in animal protein (egg prices rose 7.92%), government regulated tariffs, and the seasonal annual increase in school tuition (0.79%). Services inflation (0.09%) printed in line with the historical norm with the annual measure broadly stable at a high 4.34% (-1bp from 2H Jul). Annual headline inflation rose by 12bp to 3.26%, driven chiefly by the acceleration of the non-core component to a still very low 0.96% (vs 0.37% yoy in 2H Jul). Core inflation was broadly stable: -2bp to 3.93% yoy. So far, there is limited visible impact on core-goods ex-food from the Jan increase of a number of import tariffs. Food away from home printed at a low 0.08%, with the annual measure tracking at a still high 7.07%. By 1H Aug inflation among freely determined prices (non-regulated) rose to 3.26% yoy (3.06% yoy 1H Jul and 3.11% 2H Jul) and regulated prices inflation at a contained 3.27% (3.33% yoy 1H Jul and 3.29% 2H Jul).

Core-goods ex-food inflation moderated visibly from 4.11% yoy in 2H Nov-25 to 2.42% yoy helped by the lagged effects from MXN appreciation. The shock to perishable food prices that drove this component to a high 23.9% yoy peak during 1H March 2026 has now mean-reverted significantly (3.90% yoy by 1H Aug), but inflation in this component could reaccelerate towards the end of the year depending on the intensity and potential disruptions caused by El Niño. Services inflation remains high and sticky (4.34% yoy; vs 4.32% at end-2025 and 4.43% a year ago); high labor costs are likely to keep services inflation in the 4% handle for a while. Although the recent inflation readings point to some moderation of inflationary pressures, they are not yet comfortable enough, in particular core and services, for the central bank to entertain additional rate cuts. More so when taking into consideration recent firmer domestic activity prints and the tight Mexico-US interest rate differential.

Headline INPC: 0.10% mom (3.26% yoy), versus consensus forecast at 0.13% and GS at 0.14%; prior (2H Jul) 3.14% yoy.

Core INPC: 0.08% mom (3.93% yoy), versus consensus forecast at 0.13% and GS at 0.13%; prior (2H Jul) 3.95% yoy.

1. Headline consumer prices rose a mild 0.10% during 1H Aug (3bp below

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consensus), with annual headline inflation now tracking at 3.26% yoy (vs 3.14% in 2H Jul). 2. Core prices rose 0.08% in 1H Aug, marginally below the 0.13% Bloomberg consensus and the 0.09% print a year ago; the annual rate of core inflation is tracking at 3.93% yoy (vs 3.95% yoy 2H Jul). 3. Core-services printed at 0.09%, vs 0.10% a year ago and the 0.09% 10-year average, with the annual measure easing by 1bp from 2H July to 4.34% yoy. Services ex-education & housing declined 0.03% (vs. -0.03% a year ago) with declining airfares (-5.02%) and rising taxi fares (+1.73%). Seasonal education services rose 0.79% (vs 0.75% a year ago) with annual inflation tracking at 5.95% yoy (vs. 5.34% a year ago). Housing services rose 0.11% (vs. 0.15% a year ago) with the annual rate tracking at 3.56%, vs 3.46% a year ago. 4. Core-goods inflation printed at a low 0.07% (0.09% a year ago), with core food/beverages/tobacco up 0.14% (0.18% a year ago) and core-goods ex-food & beverages up a negligible 0.01% (0.00% a year ago). 5. Fundamental-core (supercore) inflation printed at 0.05% (0.11% a year ago) with the annual measure running at 3.45% (4.24% 1H Aug 2025). 6. Among the core measures that capture the main stylized supply shocks, the core measure sensitive to wages is running at 3.77% (3.82% yoy in 2H Jul)…