FR: Consumer Mfgd Goods Consumption

Fri Nov 27 01:45:00 CST 2015

Consensus Actual Previous Revised
Month over Month -0.1% -0.7% -0.1% 0.0%
Year over Year 1.6% 2.9% 3.0%

Household spending on manufactured goods fell a much sharper than expected 0.7 percent on the month in October. Although September's previously reported decline was revised away, annual growth of 1.6 percent equalled the slowest since last December.

Weakness was particularly apparent in autos where sales slumped 3.4 percent versus September and textiles, which were down 1.0 percent. However, household goods rose 0.5 percent and the other manufactured goods category expanded 0.2 percent.

Meantime, total goods consumption also decreased a monthly 0.7 percent, its first fall since March, to stand 2.1 percent higher on the year. Overall purchases in October were 0.6 percent below their average level in the third quarter and, with the Paris terrorist attacks likely to have hit spending this month and possibly, December too, prospects for the fourth quarter do not look good. Real GDP could well surprise on the downside.

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.