|Month over Month||0.2%||1.0%||0.2%||0.0%|
|Year over Year||1.6%||1.0%||0.4%|
Household spending on manufactured goods was unexpectedly strong in August. Following a weaker revised performance in July (now only flat), sales were up a very solid 1.0 percent on the month and now stand 1.6 percent higher on the year.
The pick-up reflected buoyancy in autos which saw a 3.1 percent monthly spurt after a cumulative 3.3 percent slump in June/July. Household goods advanced 0.9 percent but textiles fell again, albeit by only 0.1 percent, and the other products category was just flat.
Total goods spending rose a more modest, but still very respectable, 0.7 percent versus July when it decreased a revised 0.3 percent. This constituted a much needed recovery after four successive declines. Indeed, combined July/August purchases were still a hefty 0.7 percent short of their second quarter level and September will need to see a monthly jump of some 1.8 percent just to keep the quarter flat.
Accordingly, the trend in household demand remains worryingly soft and the sector looks unlikely to provide much help to real GDP growth this quarter.
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 as part of the report on 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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