|Month over Month||0.1%||0.3%||0.3%|
|Year over Year||2.2%||2.5%|
Having climbed a monthly 0.3 percent in July (see today's calendar entry) household consumption of manufactured goods rose a further 0.3 percent in August, its fifth gain in a row. Compared with a year ago purchases were up 2.2 percent, a slowdown from July's 2.5 percent rate due to unfavourable base effects.
However, most categories made little or no monthly progress with autos and household goods only unchanged and textiles down 0.4 percent. Headline growth was saved by a 0.4 percent increase in the other manufactured goods subsector.
In fact overall spending on goods was only flat at July's level, its weakest performance since March. Still, looking ahead, INSEE's measure of consumer confidence in September rose to its highest level since October 2007 and incorporated a healthy bounce in buying intentions. That said, this may have been due to a further downgrading in household inflation expectations in which case even a pick-up in retail sales volumes might prove unsustainable should businesses attempt to raise prices.
Consumption of manufactured goods by consumers is an indicator of consumer spending for household durable goods such as autos and furniture. The data are released separately but also as part of the measure of total goods spending.
This indicator is a measure of retail sales and is unique to France. It measures consumer spending for household durable goods such as autos and furniture. The data are seasonally and workday adjusted. These adjustments eliminate the fluctuations that are solely due to changes in the number of working days. The data appear to be particularly sensitive to the number of worked Saturdays. With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being.
The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.
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