Retail sales rose 0.2 percent on the month in May, compounding April's slightly smaller revised 0.1 percent gain though still the fourth advance in the last five months. However, with base effects strongly negative, the latest increase reduced annual workday adjusted growth from 2.2 percent to just 0.4 percent.

Purchases of food, drink and tobacco were unchanged having declined 1.0 percent in April while non-food, ex-auto fuel demand was just 0.1 percent firmer. Auto fuel was also down 0.4 percent.

Today's update leaves an essentially flat trend in overall sales indeed, May's reading matches exactly the level recorded at the start of the year. This is consistent with recent consumer confidence surveys where the improvement seen over the second half of 2023 seems to have run out of steam. A sluggish household sector will have been one factor behind the SNB's decision to cut its policy rate again last month. The May data put the Swiss RPI at minus 19 and the RPI-P at minus 3. In other words, economic activity in general is performing rather more weakly than expected but largely due to the surprising weakness of prices.

Yearly sales growth is seen slowing from 2.7 percent in April to 2.5 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.