Retail sales in Canada fell a somewhat larger than expected 0.8 percent in May from April as the consensus forecast saw a 0.6 percent decline. Volumes were down 0.7 percent on the month. Sales rose 1.0 percent year-over-year. The advance estimate for June sales showed a decline of 0.3 percent.

In May, when consumer prices appreciated 2.9 percent year-over-year, retail sales decreases were evident in eight of nine subsectors, led by weakness in sales at food and beverage retailers.

Core retail sales, which omit gasoline and motor vehicles, fell by 1.4 percent on the month in May and were down 0.4 percent from a year ago. Sales fell in all core retail sectors. Food and beverage was down 1.9 percent, paced by a 2.1 percent drop at grocery stores and a 3.3 percent decline in sales of beer, wine and liquor.

The only sector to show a month-over-month month gain was autos and parts, up 0.3 percent, the third rise in four months, led by an increase of 1.6 percent at new car dealers and 1.8 percent at used car dealers. Gas station sales dipped 0.6 percent, reflecting lower prices. Gas sales in volume terms rose 1.0 percent.

Retail sales in May are expected to fall 0.6 percent on the month to nearly reverse April's as-expected 0.7 percent gain.

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.