Month-over-month, retail trade volumes contracted by 0.5 percent, missing the mark consensus by a wide margin and fully reversing September's unrevised gain. Non-food products (excluding automotive fuel) saw the sharpest decline, down by 0.9 percent, while automotive fuel sales dipped slightly (minus 0.3 percent). However, sales of food, drinks, and tobacco showed resilience with a marginal increase of 0.1 percent.

On an annual basis, the retail sector showed stronger performance, with total sales up by 1.9 percent. Non-food products (excluding automotive fuel) led the growth, rising by 2.7 percent, while automotive fuel also posted a robust annual increase of 1.9 percent. Food, drink, and tobacco purchases were up 0.6 percent.

Regionally, France (0.0 percent) and Spain (0.0 percent) remained stable over the month, while Germany lost ground (minus 1.4 percent after 1.5 percent). Elsewhere the picture was similarly mixed. Today's surprisingly soft update trims the region's RPI to minus 6 and the RPI-P to exactly zero. Recent economic activity in general has been running in line with market expectations.

Forecasters see sales fading to show no change on the month in October and an increase of 2.2 percent from a year ago. That compares with September's gains of 0.5 percent on the month and 2.9 percent on year.

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.