FR: Consumer Mfgd Goods Consumption

Fri Mar 30 01:45:00 CDT 2018

Consensus Actual Previous Revised
Month over Month 1.0% 1.0% -0.9% -1.2%
Year over Year 0.6% 0.1%

Household spending on manufactured goods rebounded in February. Following a steeper revised 1.2 percent monthly drop in January, sales climbed 1.0 percent, in line with expectations to stand 0.6 percent higher on the year.

The partial recovery was mainly attributable to autos, which advanced 2.0 percent after a 3.4 percent slump last time. Textiles (3.1 percent) also had a strong month and overall durable goods gained 0.7 percent. However, household goods were down 1.1 percent and the other products category 0.2 percent lower.

Meantime, total goods spending was up 2.4 percent versus January and so more than reversed that month's 1.9 percent decrease. This put average sales in the first two months of the year 0.6 percent below their mean level in the fourth quarter, implying that purchases will need to rise 0.5 percent in March just to keep the quarter flat. However, with consumer confidence this month unchanged from February and so 8 points short of its 2017 high, prospects for quarter-end would not seem particularly bright.

Total consumer spending rose just 0.2 percent on the quarter in October-December and the softness of goods consumption in January/February warns that this quarter could be on the sluggish side too.

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.