Retail activity accelerated in October, as sales expanded 0.7 percent on the month after rising 0.5 percent in September, revised down from 0.6 percent. The slightly smaller-than-expected monthly increase translated into a 12-month gain of 2.2 percent, down from 2.7 percent the previous month.

When adjusting for prices, real sales actually grew a robust 1.4 percent on the month.

The monthly acceleration in nominal sales was likely short lived as the advance indicator points to a flat showing in November based on responses from 54.5 percent of companies surveyed.

Gains were widespread across seven of nine sectors in October, led by a 1.1 percent increase in motor vehicles and parts, without which nominal sales were still up 0.6 percent. General merchandise sales were also robust, with a 2.0 percent increase. Partly offsetting gains was a 3.1 percent drop in gasoline and fuel. Core sales, excluding motor vehicles and parts as well as gasoline and fuel, rose 1.2 percent. The only other major sector to post a decline was building material and garden equipment and supplies, down 0.2 percent on the month.

Regionally, gains were also widespread across nine provinces, with Ontario recording the largest advance (1.0 percent). Sales decreased only in Alberta.

Econoday's Relative Performance Index, at plus 15, is within a zone consistent with limited tightening risk. And if the advance indicator for November materializes, it would further comfort the Bank of Canada.

Retail sales in October are expected to rise 0.8 percent on the month on top of a better-than-expected 0.6 percent rise in September.

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.