Retail sales in Canada were as expected as they rose 0.7 percent in April, in line with the consensus expectation. . Sales were up 1.8 percent year-over-year. Volumes were up 0.5 percent on the month and up a modest 0.9 percent from a year ago.

The advance estimate for May sales was discouraging as it calls for a decline of 0.6 percent, which would undo April's increase and underline weakness in consumer spending.

In April, when consumer prices rose 2.7 percent year-over-year, retail sales increases were broad based in seven of nine sectors. Best gains came at gasoline stations and fuel vendors, up 4.5 percent on the month, and food and beverage retailers, up 1.9 percent. Core sales, excluding gas stations and fuel vendors and excluding autos and parts, rose 1.4 percent in April from March and were up 1.5 percent from a year ago.

Core sales were paced by a 1.9 percent monthly rise in sales at food and beverage retailers with sales of beer, wine and liquor retailers up a big 5.5 percent. Sporting goods, hobby, musical instrument, book, and miscellaneous retailers saw sales up 3.4 percent.

Overall retail sales gained in eight of 10 provinces in April. Alberta led the way with a gain of 3.1 percent, paced by auto sales. On the downside, Ontario saw the biggest drop, 1.0 percent, also due to lower auto sales.

Retail sales were once again weaker than expected in March, falling 0.2 percent after February's 0.1 percent decline. Sales in April are expected to rebound a sharp 0.7 percent on the month.

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.