Retailers enjoyed better fortunes in July although a rebound in sales only partially reversed June's decline. Volumes grew 0.5 percent on the month after a smaller revised 0.9 percent drop, undershooting the market consensus by 0.3 percentage points and extending the switchback profile seen since the start of the year. Annual growth was 1.4 percent, up from minus 0.3 percent. Excluding auto fuel, the picture was a little firmer with sales increasing 0.7 percent versus June.

July's monthly gain was largely attributable to the non-food sector which, excluding auto fuel, saw a 1.4 percent rise. Within this, latter, there were sizeable increases in non-specialised stores (4.0 percent) and the other stores category (2.5 percent). However, household goods and textiles and clothing (both minus 0.6 percent) lost further ground. Elsewhere, non-store retailing was up 0.7 percent but auto fuel fell 1.9 percent.

Today's report puts overall second quarter sales up 1.1 percent versus the previous period, suggesting that, despite June's setback, the underlying trend is positive. However, it also leaves both the RPI (minus 22) and RPI-P (minus 13) in negative surprise territory, showing that economic activity in general is still struggling to keep up with market expectations.

Likely biased down by poor weather, volumes fell a monthly 1.2 percent in June but July is expected to rebound 0.8 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.