Household spending on manufactured goods began the year on a surprisingly strong note. A 1.2 percent monthly bounce was well above the market consensus and following a steeper revised 1.9 percent drop in December, lifted annual growth from minus 5.0 percent to minus 3.0 percent. However, purchases were still some 3.2 percent below their pre-pandemic level in February 2020.

January's advance reflected a 2.7 percent monthly jump in durables within which household durables were up 3.2 percent and transport equipment 2.9 percent. Other engineered goods were only flat while textiles and clothing dipped 0.1 percent. Elsewhere, food (0.6 percent) rose for the first time since May last year and energy (4.0 percent) was sharply higher. Consequently, overall goods spending gained 1.5 percent, its best performance since May 2021 but still failing to fully offset December's 1.6 percent decline.

The January data put overall goods spending 0.6 percent above their average level in the fourth quarter, potentially leaving consumption on course to make a positive contribution to first quarter GDP growth. However, consumer confidence remained historically very weak in February and was only just above the all-time low posted in June 2013. Much the same applies to buying intentions so the near-term outlook for retailers is probably still fairly grim. Even so, today's updates put the French ECDI at 27 and the ECDI-P at 38, both measures signalling a tidy degree of overall economic outperformance versus market expectations.

Spending is expected to rise 0.4 percent on the month after a 1.6 percent slump in December.

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.