FR: Consumer Mfgd Goods Consumption

Fri Sep 29 01:45:00 CDT 2017

Consensus Actual Previous Revised
Month over Month 0.3% -0.2% 0.7% 0.6%
Year over Year 1.3% 2.3%

Household spending on manufactured goods was surprisingly soft in August. Following a smaller revised 0.6 percent rise in July, purchases fell 0.2 percent and now stand 1.3 percent higher on the year.

Weakness was mainly apparent in food where sales were down 1.0 percent on the month. This masked a 0.3 percent rise in durable goods with both transport equipment and textiles gaining 0.4 percent, and a 0.2 percent advance in the other engineering category. Elsewhere, energy contracted 0.3 percent.

As a result, overall goods consumption dropped a monthly 0.3 percent, its second decline in the last three months. Average purchases in July/August were just 0.3 percent above their second quarter mean. Moreover, consumer confidence dipped in September and, while only loosely correlated on a monthly basis, warns that the third quarter as a while may prove a little disappointing.

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.