Retailers had a better time of it in January although a monthly increase in sales failed to fully reverse their year-end decline. Volumes rose 0.6 percent following a slightly shallower revised 1.6 percent fall in December. The increase put annual growth at minus 2.2 percent, up from minus 3.0 percent but only in line with the market consensus.

January's partial rebound was almost wholly attributable to the food, drink and tobacco sector where purchases jumped fully 3.1 percent on the month, their strongest gain since March 2021. By contrast, non-food (ex-auto fuel) sales were down 1.2 percent, compounding January's 0.6 percent fall and making for a third decline in the last four months. Auto fuel advanced 0.4 percent.

Today's update leaves overall volume sales in January 0.4 percent below their average level in the fourth quarter. This means February/March will need a pick-up if the retail sector is not to subtract from first quarter GDP growth. At now 14, the Swiss ECDI points to limited outperformance by economic activity in general but with the ECDI-P at minus 10, upside surprises remain limited to the inflation data.

Sales are seen down 2.2 percent on the year after a 2.8 percent fall in December.

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.