| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.0% | 0.6% | -0.1% | |
| Year over Year | -0.3% | 2.7% | 1.6% | 1.7% |
Highlights
Retail sales expanded more than expected in September, when they were up 0.6 percent from August, for a 2.7 percent 12-month advance. The preliminary estimate for October points to a further increase of 0.8 percent.
Higher prices explained half of the increase, as volumes rose 0.3 percent in September. As a result, while nominal sales grew 0.6 percent in the third quarter, volumes, more relevant to real GDP, contracted 0.5 percent.
Nominal sales excluding motor vehicles and parts were up just 0.2 percent. When also excluding gasoline and fuel, core sales were actually down 0.3 percent, reflecting weakness behind the headline number.
Gains were concentrated in four sectors: motor vehicles and parts (1.5 percent), building material and garden equipment and supplies (0.5 percent), general merchandise (0.3 percent) and gasoline and fuel (3.2 percent).
Sales decreased in the other five sectors, led by a 1.6 percent drop in sales of sporting goods, hobby, musical instrument, book and miscellaneous, as well as a 0.4 percent decline in food and beverages.
With Econoday's relative Performance index now consistent with building tightening risk and preliminary data pointing to further sales gains, the Bank of Canada will remain vigilant. That being said, weakness in core sales provides leeway to continue to assess how the economy evolves without further immediate rate hikes.
In addition, an Ipsos survey published Thursday shows that seven in 10 Canadians are worried about being able to afford essentials and 70 percent are concerned about their overall financial health and wellness. A vast majority also believe the economy heading is heading into recession if not already in it. One in three homeowners also thinks further rate hikes might force them to sell their home. The central bank thus has to navigate a delicate balancein considering the path forward.
Higher prices explained half of the increase, as volumes rose 0.3 percent in September. As a result, while nominal sales grew 0.6 percent in the third quarter, volumes, more relevant to real GDP, contracted 0.5 percent.
Nominal sales excluding motor vehicles and parts were up just 0.2 percent. When also excluding gasoline and fuel, core sales were actually down 0.3 percent, reflecting weakness behind the headline number.
Gains were concentrated in four sectors: motor vehicles and parts (1.5 percent), building material and garden equipment and supplies (0.5 percent), general merchandise (0.3 percent) and gasoline and fuel (3.2 percent).
Sales decreased in the other five sectors, led by a 1.6 percent drop in sales of sporting goods, hobby, musical instrument, book and miscellaneous, as well as a 0.4 percent decline in food and beverages.
With Econoday's relative Performance index now consistent with building tightening risk and preliminary data pointing to further sales gains, the Bank of Canada will remain vigilant. That being said, weakness in core sales provides leeway to continue to assess how the economy evolves without further immediate rate hikes.
In addition, an Ipsos survey published Thursday shows that seven in 10 Canadians are worried about being able to afford essentials and 70 percent are concerned about their overall financial health and wellness. A vast majority also believe the economy heading is heading into recession if not already in it. One in three homeowners also thinks further rate hikes might force them to sell their home. The central bank thus has to navigate a delicate balancein considering the path forward.
Market Consensus Before Announcement
Retail sales in September are expected to come in unchanged following a 0.1 percent dip in August.
Definition
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.
Description
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.
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.
