Household consumption dropped by 0.6 percent in January, marking a stark reversal from December's 0.4 percent growth. The downturn was driven by a 2.4 percent plunge in engineered goods, particularly durable goods (minus 3.9 percent), as demand for cars, motorcycles, and household electronics slumped following a purchase surge ahead of new regulatory changes.

The fashion sector also cooled, with textile and clothing spending down by 1.7 percent, likely due to post-holiday fatigue and weaker seasonal demand. Even other engineered goods saw a minor decline (minus 0.3 percent), reinforcing a broader consumer shift away from non-essential purchases.

However, food consumption rebounded (1.4 percent), reversing December's decline, driven by increased spending on agri-food products. This suggests that consumers prioritised essentials amid changing economic conditions. Meanwhile, energy spending slowed significantly (0.2 percent after 2.4 percent), as lower fuel demand offset higher heating costs, reflecting a possible adaptation to winter price fluctuations.

The data highlights a post-holiday correction, with consumers tightening spending on big-ticket items while ensuring essential needs were met. This latest update leaves the RPI at minus 14 and the RPI-P at minus 10. This means that economic activities are slightly behind market expectations of the French economy.

Consumption of manufactured goods by consumers is an indicator of consumer spending for household durable goods such as autos and furniture. The data are released separately as part of the report on total goods spending.

This indicator is a measure of retail sales and is unique to France. It measures consumer spending for household durable goods such as autos and furniture. The data are seasonally and workday adjusted. These adjustments eliminate the fluctuations that are solely due to changes in the number of working days. The data appear to be particularly sensitive to the number of worked Saturdays. With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being.

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.