CH: Adjusted real retail sales

Tue Apr 03 02:15:00 CDT 2018

Actual Previous Revised
Y/Y % change -0.2% -1.4% -0.4%

Retail sales made back some ground in February. A 0.3 percent monthly rise fully reversed a smaller revised 0.3 percent fall in January but still left workday adjusted purchases 0.2 percent below their level a year ago.

In fact, the underlying performance was weak. Hence, excluding auto fuel, non-food volumes were down 0.6 percent on the month, their second decline in the last three months. It was food, drink and tobacco (0.9 percent) that once again provided the main support for the headline change.

Despite February's rebound, average overall sales in January/February were 0.1 percent below their fourth quarter mean and warn that the retail sector will probably offer little support to quarterly GDP growth. If so, the recovery in consumer prices is likely to remain sluggish and all the more vulnerable to any rebound in the Swiss franc.

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.