Retail sales in Canada dipped by 0.3 percent in June from May, exactly as expected, which left sales down 0.5 percent for the second quarter. In volume terms, sales rose 0.1 percent on the month. Sales were up a meager 0.2 percent year-over-year. The advance estimate for July sales suggests improvement with an increase of 0.6 percent.

In June, when consumer prices appreciated 2.7 percent year-over-year, retail sales decreases were evident in four of nine subsectors, led by weakness in sales at motor vehicles and parts dealers, which fell 2.1 percent on the month, and were down 2.7 percent from a year ago. The other weak link was gas and fuel sales, down 0.5 percent on the month; in volume terms, gas and fuel sales actually rose 2.6 percent.

Core retail sales, which omit gasoline and motor vehicles, rose by 0.4 percent in June from May, and were up 1.2 percent from a year ago.

Core sales were paced by a 1.2 percent increase in sales on the month at food and beverage stores, with supermarket and grocery store sales up 1.8 percent. On the downside, sporting goods and hobby store sales fell 0.8 percent.

Retail sales were down in seven of ten provinces in June. Ontario, the biggie with about 40 percent of Canada's population, fared worst with a decline of 0.4 percent, led by lower auto sales. In the Toronto metro area, sales were up 0.3 percent on the month. In Manitoba, sales fell 2.2 percent on the month and the culprit again was auto sales.

Retail sales in June are expected to fall 0.3 percent on the month after falling 0.8 percent in May.

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.