FR: Consumer Mfgd Goods Consumption

November 29, 2016 01:45 CST

Consensus Actual Previous Revised
Month over Month 0.3% 0.5% -0.3% -0.5%
Year over Year 2.2% 1.2% 0.8%

Household spending on manufactured goods rebounded modestly in October. Following a steeper revised 0.5 percent monthly fall in September, purchases rose 0.5 percent to stand 2.2 percent above their level a year ago.

Spending on durable goods was up 0.4 percent on the month after gains of 1.5 percent and 0.3 percent in August and September respectively but auto purchases were down 1.0 percent. Household goods (2.5 percent) had a good month as did textiles (2.1 percent) and the other manufactured goods category (0.2 percent) also reversed half of the previous period's setback.

Total goods spending was a healthy 0.9 percent higher than in September when it decreased 0.4 percent. This also yields a 0.9 percent increase versus the third quarter average when purchases fell 0.5 percent and did much to check overall economic growth. Fourth quarter GDP still looks unlikely to impress but this report certainly bodes well for some much-needed pick-up in momentum.

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.