|Month over Month||0.2%||0.5%||-0.3%||0.1%|
|Year over Year||2.6%||1.3%||1.9%|
Household spending on manufactured goods rose a stronger than expected 0.5 percent on the month in February and that following an upwardly revised 0.1 percent gain in January. Annual growth of purchases climbed from 1.9 percent to 2.6 percent, its best reading since September 2015.
February's advance was driven by a 1.5 percent monthly bounce in spending on food and a 1.2 percent increase in energy consumption. Autos (0.5 percent) and household durables (3.1 percent) also performed well but textiles were off 4.4 percent.
Total goods spending was up 0.6 percent versus January following a stronger revised 1.0 percent increase at the start of the year. As a result, average goods consumption in January/February was a healthy 1.6 percent above its fourth quarter mean. INSEE is looking for a 0.8 percent gain in overall household consumption this quarter following a 0.2 percent drop last quarter, in part attributable to the effects of the Paris terrorist attacks in November. So far the omens look good which in turn would bode well for real GDP growth. Even so, March could yet disappoint with consumer confidence falling to its lowest level since August 2015.
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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