Retail sales were weak at the start of the quarter. Following a marginally smaller revised 0.7 percent monthly rise in March, volumes fell 0.5 percent, more than double the market consensus. The decline reduced annual growth from 0.7 percent to zero and left purchases back at their level seen at the start of the year.

April's monthly setback was led by food, drink and tobacco which also posted a 0.5 percent fall. Non-food, ex-auto fuel dipped just 0.1 percent but auto fuel was off fully 2.2 percent.

Regionally, a 1.2 percent slide in Germany did most of the damage but both France (minus 0.4 percent) and Italy (minus 0.2 percent) also recorded losses. By contrast, Spain (0.8 percent) had a good month while elsewhere, the picture was very mixed.

The April data leave an essentially flat profile to Eurozone retail sales and potentially point to, at best, only a small positive contribution from the sector to second quarter GDP growth. However, the ECB should see weak demand as bolstering the chances of making further progress towards meeting its 2 percent inflation target. Today's report trims the region's RPI to minus 7 and the RPI-P to minus 17. Having outperformed since early May, economic activity in general is now running slightly behind market forecasts.

Retail sales volumes in April are expected to drop 0.2 percent on the month after March's surprise 0.8 percent monthly rise.

Retail sales measure goods that are sold to the consumer or end-user, generally in small quantities and in the state in which they were purchased by the retailer. Eurozone retail sales are reported monthly, in volume terms and exclude autos and motorcycles. A limited sector breakdown is presented in the first release but much more detail is available in the following period's release.

Retail sales are important indicators of domestic consumer demand and are monitored closely by analysts as an important input to GDP. 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's a big advantage for investors. The data are available in both value and volume measures although the press release deals only with volume. In addition to the total, the initial report provides a limited breakdown that separately identifies food, drink and tobacco, and (excluding automotive fuel) non-food products. A more comprehensive dataset is only available with the following month's release. Unlike the U.S. and Canada, auto sales are not included in the retail sales data.

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.