Retail sales were much firmer than expected in January. A 0.7 percent monthly rise was the best performance since last June and following a shallower revised 0.3 percent fall in December, lifted volumes to a 7-month high. Annual workday adjusted growth was 0.3 percent, up from minus 0.1 percent and the first positive post since the middle of last year.

The monthly headline gain was largely due to food, drink and tobacco where purchases jumped 1.5 percent having declined in each of the previous three months. Discretionary spending was up a more modest 0.6 percent but this was its third increase in the last four months. Auto fuel was down 0.4 percent.

The January update leaves overall sales 0.7 percent above their average level in the fourth quarter when they rose 0.3 percent versus July-September. Consumer confidence is not historically high but it is improving and this seems to be providing some support for spending. More generally, today's report lifts the Swiss RPI to minus 18 and the RPI-P to 5. Unexpectedly weak overall economic activity is only due to the surprising softness of inflation but it will be the latter that will dominate the SNB's policy decision later this month.

Annual growth is seen moving up from minus 0.8 percent in December to minus 0.2 percent.

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.