CH: Adjusted real retail sales

Tue Jan 09 02:15:00 CST 2018

Actual Previous Revised
Y/Y % change -0.2% -3.0% -2.6%

Retail sales rebounded in November. However, a 1.3 percent monthly spurt was essentially only enough to offset a (smaller revised) 1.2 percent slump in October. Workday adjusted annual growth was still negative at minus 0.2 percent although at least this constituted a marked improvement on the minus 2.6 percent recorded last time.

On the positive side, November's recovery was dominated by discretionary spending as, excluding auto fuel, non-food purchases jumped 1.5 percent versus October when they declined 1.3 percent. Food, drink and tobacco sales increased a more modest 0.4 percent and so failed to reverse the previous period's 1.0 percent slide.

Retail sales have been particularly erratic in recent months and, despite November's bounce, average purchases in October were just unchanged from their third quarter mean. Indeed, sales in November alone only matched their level at the start of the year. The Swiss economy has certainly picked up some momentum since the first quarter of 2016 but households remain very cautious about spending plans.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The survey comprises around 4,000 companies with the small-sized firms asked to provide monthly turnover data on a quarterly basis. Statistics are provided in both nominal and volume measures; the latter is the more important for financial markets. The headline figure is the annual growth in sales volumes adjusted for differences in trading days. Seasonally adjusted monthly changes are also provided. Details are limited in the first estimate but a more complete picture is provided with the following month's release.

Consumer spending accounts for a large portion of the economy, so if you know what consumers are up to, you will have a pretty good idea on where the economy is headed. Needless to say, that is a big advantage for investors. 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.