FR: Consumer Mfgd Goods Consumption

Fri Jul 28 01:45:00 CDT 2017

Consensus Actual Previous Revised
Month over Month -0.2% -0.7% 0.8% 0.7%
Year over Year 0.7% 1.5%

Household spending on manufactured goods fell a larger than expected 0.7 percent on the month in June. The decline fully reversed a smaller revised 0.7 percent increase in May and reduced annual growth from 1.5 percent to 0.7 percent.

Weakness was most apparent in textiles which posted a 4.7 percent monthly slump and overall durable goods were off 0.3 percent. However, autos were up 0.1 percent and household goods climbed 1.0 percent. Moreover, there was also a useful 0.3 percent gain in the other stores category.

Nonetheless, total goods spending was 0.8 percent below its May level, offsetting much of its 0.9 percent mid-quarter bounce. Today's flash GDP accounts showed household spending increasing at a relatively modest 0.3 percent quarterly rate in the April-June period. A stronger performance here will probably be needed if the recent acceleration in economic growth is to be furthered.

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.