Retailers enjoyed a much-needed pick-up in demand in March. A 1.8 percent monthly jump in sales volumes was more than double the market consensus and the first increase since last October. After a smaller revised 1.5 percent drop in February, the rise put purchases at a 4-month high but leave a still generally soft picture of household spending. Unadjusted annual growth now stands at minus 2.7 percent.

March's unexpected buoyancy was attributable to the food sector where sales climbed 3.6 percent versus February. This more than offset a 0.2 percent decline in the non-food sector. Internet and mail order rose 3.3 percent after a hefty fall in February.

Despite March's spurt, the latest data leave first quarter purchases 1.0 percent below their fourth quarter level, confirming another negative contribution to the period's GDP growth. Falling inflation should provide a boost to the current quarter but until consumer confidence recovers closer to its long-run norm, spending looks likely to remain quite sluggish. Even so, today's update leaves both the German RPI (31) and RPI-P (47) well above zero and so show overall economic activity running some way ahead of market expectations.

Sales volumes are expected to rise 0.7 percent on the month in March in a partial rebound from February's much steeper-than-expected 1.9 percent drop. Purchases have declined in each of the last four reports.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data are compiled from about 27,000 retail businesses and are reported in both nominal and volume terms. Autos are excluded. A very limited breakdown of subsector performance is available in the initial report which is itself subject to sometimes sizeable revision but much greater detail is provided in the following month's release.

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. However, by excluding the services sector, changes in retail sales data can differ significantly from those in total household spending.