CA: Retail Sales

Fri Jun 22 07:30:00 CDT 2018

Consensus Actual Previous
Month over Month 0% -1.2% 0.6%
Year over Year 1.6% 4.1%

April retail sales disappointed, declining 1.2 percent on the month following three consecutive monthly increases. The decrease was primarily due to lower sales at motor vehicle and parts dealers. Inclement weather in many parts of Canada also may have contributed to the overall decline in April. Excluding sales at motor vehicle and parts dealers, retail sales slipped 0.1 percent in April. Sales were down in 8 of 11 subsectors, representing 65 percent of retail trade. In volume terms, sales declined 1.4 percent.

Motor vehicle and parts dealers declined 4.3 percent. Sales at new car dealers fell 5.1 percent, after increasing 3.7 percent in March and 2.2 percent in February. Ontario, which accounted for the majority of the decline in dollar terms at motor vehicle and parts dealers, experienced cooler than usual temperatures throughout the month, as well as freezing rain in mid-April.

Sales were down at general merchandise stores for the first time in four months. Building material and garden equipment and supplies dealers reported a decrease in sales for the fifth time in six months. Food and beverage stores were up following three consecutive monthly declines. Receipts at gasoline stations increased reflecting higher prices at the pump. In volume terms, receipts at gasoline stations were down 0.1 percent.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The headline data are reported in cash terms and disaggregated into eleven main subsectors. Aggregate volume figures are also provided.

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.