FR: Consumer Mfgd Goods Consumption

Tue Aug 29 01:45:00 CDT 2017

Consensus Actual Previous Revised
Month over Month 0.6% 0.7% -0.7% -0.6%
Year over Year 2.3% 0.7% 1.0%

Household spending on manufactured goods recovered in July. Following a slightly smaller revised 0.6 percent monthly fall in June, purchases rebounded a much as expected 0.7 percent to lift annual growth by 1.3 percentage points to 2.3 percent, an 8-month high.

July's monthly rebound was led by durable goods which advanced 0.9 percent and have now expanded for three consecutive months. Household goods (2.7 percent) were particularly robust and were supported by textiles (3.1 percent) and, to a much lesser extent, the other manufactured goods category (0.2 percent). However, autos (minus 0.2 percent) struggled.

With food up 0.8 percent and energy down 0.5 percent, total goods spending also gained 0.7 percent versus June when it fell an equivalent amount. This put goods consumption 0.5 percent above its second quarter average and so bodes cautiously well for overall household demand this quarter. That said, August consumer confidence dipped again and buying intentions also softened so a decent third quarter cannot be taken for granted.

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.