Having risen an unrevised monthly 0.4 percent in November, household spending on manufactured goods was much weaker than expected in December. A 1.6 percent fall was well wide of the market consensus and cut annual growth from minus 3.7 percent to minus 4.6 percent. Purchases were left some 4.0 percent below their pre-pandemic level in February 2020.

December's setback reflected a 4.9 percent monthly slump in household durables and a 2.3 percent drop in transport equipment. Other engineered goods (minus 0.1) also lost ground but textiles and clothing (0.8 percent) saw a second consecutive gain. Elsewhere, food (minus 1.7 percent) extended its trend decline but energy (0.7 percent) gained ground. Consequently, overall goods spending was down 1.3 percent after a 0.6 percent increase in November.

Despite December's advance, quarterly total goods spending was still down 1.9 percent versus July-September and so subtracted from the period's real GDP growth. Looking ahead, consumer confidence in January was again very weak and only just above its all-time low while buying intentions slipped to their lowest mark since May 2020. With inflation still very high and strike activity against pension reform gaining ground, near-term prospects remain poor. Even so, for now, with both the French ECDI and ECDI-P at exactly zero, overall economic activity is performing in line with market expectations.

Spending is seen rising 0.2 percent on the month after a 0.4 percent increase in November.

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.