Largest remittance drop since 2012 is not why Mexican retail is stalling

MXPE Weekly Essentials ft. income redistribution, SpaceX debris, and other highlights in Mexican politics, policy, and markets from the past week.

MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Mexico has experienced three months of falling remittances, now the largest drop since 2012. The $5 billion dollars sent in June—money that comes mostly from the US and that goes chiefly to working class Mexican families—fell by 16.2% compared to 2024 levels.

The fall lines up squarely with Donald Trump’s crackdown against migrants, many whose work has been disrupted by Immigration and Customs Enforcement (ICE). Its budget has been expanded significantly, so the Mexican economy is bracing for further hits to remittance flows.

One could imagine, given 4.1 million Mexicans receive remittances, that Mexican consumption would take a hit. Indeed, that’s what some companies have been hinting at as retail has posted terrible profit reports this quarter.

The real culprit seems to lie elsewhere though. Because, it turns out, Mexicans are still out buying.