After spending 0.4 percent more on manufactured goods in June, French consumers tightened their purse strings in July, with spending flat. Compared to July of last year, spending was up a modest 0.4 percent.

Spending on clothing and textiles was 2.0 percent below June, the slowest pace since decreasing 4.7 percent in October of last year, and down 1.3 percent from July of last year. This was partially attributed to summer sale prices not being marked down as much as in previous years.
However, spending on durables goods was up 0.7 percent in July, coming on the heels of a 0.9 percent gain the previous month. Including household durables, spending increased 2.2 percent on the month, helped by spending on household appliances and communications equipment.

Spending on durable goods including transportation fell 0.6 percent after a 2.6 percent month-on-month gain in June, likely due to a pullback in the purchase of new cars.

Overall, consumers were helped by a decline in energy prices which fell 1.7 percent in July after a 3.4 percent increase in June, mainly due to a 3.3 percent fall in outlays for petroleum products. Taking this into account, consumer spending fell 0.3 percent on the month after a 0.4 percent increase in June.

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.