FR: Consumer Mfgd Goods Consumption

Tue Jan 30 01:45:00 CST 2018

Consensus Actual Previous Revised
Month over Month 0.4% -1.0% 1.4% 2.2%
Year over Year 1.3% 1.6% 2.4%

Household purchases of manufactured goods were surprisingly weak in December. A 1.0 percent monthly fall was the second sizeable decline since September and did much to halve the quarterly growth rate of overall consumer spending to a modest 0.3 percent (see today's flash GDP calendar entry). However, it was not all bad news as November's already robust monthly gain was revised up from 1.4 percent to 2.2 percent.

December was hit by a 6.5 percent monthly slump in household goods, compounded by a 1.9 percent drop in textiles. Food (minus 1.4 percent) also struggled but autos (0.9 percent) and the other manufactured goods category (0.1 percent) kept their heads above water.

With spending on energy down 0.4 percent versus November, total goods consumption declined 1.2 percent after a 3.0 percent bounce in November. Over the fourth quarter, it contracted 0.1 percent. High levels of consumer confidence suggest that January will see a rebound but with the fallout from the impending labour market reform uncertain, consumers may yet start 2018 on a more cautious note.

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.