FR: Consumer Mfgd Goods Consumption

Tue Oct 31 02:45:00 CDT 2017

Consensus Actual Previous Revised
Month over Month 0.6% 0.8% -0.2%
Year over Year 2.9% 1.3% 1.4%

Following a poor August, household spending on manufactured goods rebounded in September. A 0.8 percent monthly advance was slightly larger than expected and, following an unrevised 0.2 percent drop in mid-quarter, raised annual growth from 1.4 percent to 2.9 percent its best performance since March 2016.

September's monthly gain was largely attributable to the buoyancy of household goods which were up 1.1 percent on the month. Textiles (0.7 percent) also fared well but autos dipped 0.3 percent and the other products category declined 0.5 percent.

Meantime, total goods spending advanced a monthly 0.9 percent, easily more than reversing their 0.2 percent August setback. This made for a third quarter gain of 0.7 percent versus April-June when it advanced 0.6 percent. The gentle pick-up here was a key factor helping to support third quarter economic growth (see today's flash GDP entry). Consumer confidence slipped in October but remained high enough to suggest that household consumption made a decent start to the current quarter.

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.