CA: Retail Sales

Fri Aug 21 07:30:00 CDT 2015

Consensus Actual Previous Revised
Month over Month 0.3% 0.6% 1.0% 0.9%
Year over Year 1.4% 2.7%

Retail sales rose a higher-than-expected 0.6 percent in June vs May, boosted by higher prices that offset flat volumes. Excluding autos, sales rose a monthly 0.8 percent for a second straight month. Excluding both autos and gasoline, sales rose 0.5 percent following May's 0.8 percent gain. Gasoline stations, boosted by higher prices, posted the strongest monthly gain in dollar terms at 2.6 percent but were down a year-on-year 13.2 percent.

Year-on-year, retail sales to June were up 2.2 percent vs the first half of last year. For the quarter, sales rose 1.9 percent from the second-quarter last year though volumes were up only 0.4 percent.

Sales were up 11 subsectors representing 64 percent of Canadian retail trade. Sales at electronics & appliance stores jumped 9.4 percent in the month on strong phone sales. Sales at general merchandise stores rose 0.3 percent. Clothing was flat and building materials were down.

Retail sales measure the total receipts at stores that sell durable and nondurable goods.

With consumer spending a large part of the economy, market players continually monitor spending patterns. Data are available both for total retail sales and those excluding autos and for 16 different store specializations. Since autos account for over 25 percent of retail sales, the sector can have a pronounced impact on overall sales given their volatility. Retail sales are used to estimate the goods portion of personal consumer expenditures in the quarterly GDP accounts, accounting for about 50 percent of the total.

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.