FR: Consumer Mfgd Goods Consumption

Fri Jun 30 01:45:00 CDT 2017

Consensus Actual Previous Revised
Month over Month 0.5% 0.8% -0.4% -0.5%
Year over Year 1.5% 0.4% 0.3%

Household spending on manufactured goods rebounded in May. A stronger than expected 0.8 percent monthly increase followed a marginally steeper revised 0.5 percent fall in April to put purchases 1.5 percent above their level a year ago.

May's monthly recovery was broad-based and there were particularly solid rises in autos (2.0 percent) and textiles (4.6 percent). The other products category (0.2 percent) also made fresh progress but household goods were only flat.

Meantime, total goods consumption was up a slightly larger 1.0 percent versus April for a yearly gain of 1.5 percent. Following a poor start to the year, the second quarter seems to be shaping up well and average goods spending in April/May was 0.5 percent higher than the mean level in January-March. Moreover, June looks to have been a good month too with consumer confidence climbing to its highest mark in a decade. Second quarter GDP growth should be respectable.

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.