Retail sales in Canada rose by a surprising 0.9 percent in July from June, well above the expected 0.6 percent rebound from June's decline. In volume terms, sales rose an even stronger 1.0 percent on the month. Sales were also up 0.9 percent year-over-year. The advance estimate for August sales suggests nice ongoing resilience with an increase of 0.5 percent.

In July, when consumer prices appreciated 2.5 percent year-over-year, retail sales increases were evident in eight of nine subsectors, led by motor vehicles and parts, which rebounded from a weak showing in June to rise 2.2 percent in July from June. On the downside, sales at gas stations and fuel vendors dipped by 0.6 percent, and in volume terms were down 1.7 percent.

Core retail sales, which omit gasoline and motor vehicles, rose by 0.6 percent in July from June, and were up 0.5 percent from a year ago. The rise in core sales reflected a 0.8 percent rise in food and beverage and a 0.8 percent gain in general merchandise sales.

Retail sales in July are expected to rebound 0.6 percent on the month after falling 0.3 and 0.8 percent in the two prior months.

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.