Spending on manufactured goods rose 0.3 percent on the month in July, matching market expectations and following a marginally weaker revised 1.1 percent gain in June. Annual growth improved from minus 2.8 percent to minus 0.9 percent but volumes were still 4.0 percent below their pre-pandemic level in February 2020.

July's modest monthly increase reflected a 3.0 percent jump in durables within which transport equipment rose 1.5 percent and household durables fully 6.8 percent. Other engineered goods also advanced 0.3 percent but textiles and clothing dipped a further 0.1 percent. Elsewhere, food was down 0.9 percent and energy 0.2 percent. As a result, overall goods spending also advanced 0.3 percent although annual growth remained negative at minus 1.1 percent.

The July report puts overall goods spending a solid 1.1 percent above its second quarter average. This bodes well for a positive contribution from the household sector to third quarter GDP growth having subtracted in the previous period. Even so, with consumer confidence unchanged in August and so still close to its all-time low and buying intentions similarly historically very weak, near-term prospects for consumption in general would still appear subdued. Today's reports put the French ECDI at 13 and the ECDI-P at minus 9. In other words, while overall economic activity is running a little hotter than expected, the real economy is modestly underperforming.

Spending in July is expected to rise 0.3 percent on the month following a 1.2 percent gain in June.

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.