Retail sales held up much better than expected in February. A flat monthly reading was comfortably above the market consensus and followed an even stronger revised 3.6 percent bounce in January. Base effects saw annual growth slip from 0.5 percent to minus 0.4 percent but purchases stand at their highest level since last June.

Excluding auto fuel, the picture was slightly firmer with sales up 0.2 percent on the month, making for a 0.5 percent yearly decline.

The stable monthly performance reflected falls in the sale of food (0.3 percent) and auto fuel (1.3 percent) that just offset a rise in non-food demand (0.7 percent). Non-specialised stores (1.6 percent) and textiles and clothing (1.7 percent) had a particularly good month but household goods (minus 1.0 percent) were weak and non-store retailing only unchanged. Very wet weather may have had a negative impact.

Today's update puts average total volume sales in the first two months of the quarter fully 1.7 percent above their mean level in the fourth quarter of last year. Accordingly, the sector remains on course to provide a tidy positive contribution to GDP growth. The February data also lift the UK RPI to minus 19 and the RPI-P to minus 14 but both values still show economic activity in general falling slightly short of market expectations.

After rebounding a monthly 3.4 percent in January following December's 3.3 percent slump, volume sales in February are expected to fall back 0.5 percent.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data include all internet business whose primary function is retailing and also cover internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. Headline UK retail sales are reported in volume, not cash, terms but are available in both forms. The data are derived from a monthly survey of 5,000 businesses in Great Britain. The sample represents the whole retail sector and includes the 900 largest retailers and a representative panel of smaller businesses, including internet sales. Collectively, all of these businesses cover approximately 90 percent of the retail industry in terms of turnover.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The monthly retail sales report contains sales data in both pounds sterling and volume. UK retail sales data exclude auto sales.

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 apparel sales are showing exceptional weakness but electronics sales are soaring. 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.