Retail sales were surprisingly strong in July. A solid 1.4 percent monthly rise in volumes was the largest in more than a year and easily eclipsed a steeper revised 0.3 percent fall in June. Annual growth jumped from minus 2.6 percent to 2.7 percent, well above the market consensus and its first positive print since April.

July's monthly bounce was attributable to a 2.2 percent spurt in purchases of food, drink and tobacco and a 1.4 percent gain in non-food sales, excluding auto fuel. Auto fuel was also up 1.2 percent.

The latest report puts overall sales 1.4 percent above their average level in the second quarter and lifts the Swiss RPI to 4 and the RPI-P to 8. Both gauges stand above zero for the first time since early June but indicate only a very mild degree of overall economic outperformance.

Sales volumes are seen falling 0.2 percent on the month in July after a 2.2 percent drop in June.

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.