|Month over Month||0.3%||-0.5%||0.4%||0.5%|
|Year over Year||0.4%||3.0%||3.1%|
Household spending on manufactured goods was much weaker than expected in December. A 0.5 percent monthly drop fully reversed November's marginally firmer revised gain and reduced annual growth from 3.1 percent to just 0.4 percent.
Outside of autos (1.8 percent), most of the key sectors had a poor month. In particular, household durables were down 3.6 percent versus November while food was off 0.6 percent and textiles 0.1 percent lower. To make matters worse, energy declined 2.7 percent. This left just the other manufactured goods category (0.2 percent) to provide any support for total goods consumption which fell a sizeable 0.8 percent after a 0.6 percent advance last time.
Fortunately, the buoyancy of earlier months ensured that quarterly growth of overall goods spending was still positive and, at 0.9 percent, this provided a useful boost to real GDP growth (see today's flash report). Nonetheless, December's surprisingly sharp reversal raises a question mark over prospects for consumption in the current 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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