FR: Consumer Mfgd Goods Consumption

Fri Apr 27 01:45:00 CDT 2018

Consensus Actual Previous
Month over Month 0.4% 0.4% 1.0%
Year over Year 1.0% 0.6%

Household spending on manufactured goods rose 0.4 percent on the month in March following an unrevised 1.0 percent bounce in February. Annual consumption growth was 1.0 percent, up from 0.6 percent last time.

March's monthly gain reflected strength in transport equipment and household durables which rose 1.3 percent and 2.5 percent respectively. Other engineered goods were also up 0.5 percent but textiles, which have been especially volatile recently, declined a sizeable 1.6 percent. Despite the headline advance, first quarter purchases still fell 0.2 percent versus the previous period following a weak December and January.

Meantime, with food just 0.2 percent firmer and energy declining 1.6 percent on the back of warmer weather, overall goods consumption increased a minimal 0.1 percent on the month. This made for a flat first quarter. Consumer confidence improved marginally in April but was still well short of the levels seen over much of 2017. This provides early warning of a possible sluggish start by households 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.