Household spending on manufactured goods unexpectedly jumped in June. A 1.2 percent monthly spike was nowhere close to the market consensus and the best performance since last September. The latest gain put annual growth at minus 2.9 percent, up from minus 4.0 percent previously but still left volumes fully 4.5 percent short of their pre-pandemic level in February 2020.

Overall goods spending rose a monthly 0.9 percent, led by a 2.5 percent jump in food. Engineered goods dipped 0.1 percent as transport equipment fell 1.4 percent and textiles and clothing 0.4 percent but the other goods category advanced 0.9 percent. Elsewhere, energy was up 0.1 percent.

Looking ahead, consumer confidence was unchanged in July, leaving it well short of its long-run average and close to its all-time low. Buying intentions were a little firmer than in June but similarly still very weak. Consequently, with the ECB having only just raised interest rates again yesterday, the near-term outlook for consumption remains precarious. Even so, for now, with the French ECDI at 18 and the ECDI-P at 21, overall economic activity is still performing rather better than expected.

Spending is expected to be flat on the month after rising 0.4 percent in May.

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.