Canada retail sales increased 0.3 percent in April, less than even the lowest forecast of 0.4 percent in an Econoday survey, which had the consensus at 0.5 percent. Volumes, more relevant to real GDP, were up 0.5 percent.

Looking ahead, the picture isn't bright, with the advance estimate pointing to a 1.1 percent decrease in May, when the unemployment rate reached 7.0 percent, the highest since September 2016 when excluding the 2020 and 2021 pandemic years.

Sales increased in six of nine subsectors in April, led by a 1.9 percent gain in motor vehicles and parts, while gasoline and fuel were down 2.7 percent as gasoline prices dropped 10.2 percent in April from March and overall energy prices fell 7.9 percent. Sales volumes actually increased 0.4 percent on the month.

Core retail sales, excluding gasoline stations, fuel vendors and auto and parts dealers, edged up 0.1 percent on the month, led by a 1.0 percent gain in sporting goods, hobby, musical instrument, book, and miscellaneous sales, and a 0.8 percent increase in furniture, home furnishings, electronics and appliances. Not all housing-related tickets increased, as sales of building material and garden equipment and supplies contracted 0.4 percent.

Spending on food and beverages increased 0.2 percent in April, when food prices rose 0.4 percent. Meanwhile, sales of clothing, clothing accessories, shoes, jewelry, luggage and leather goods sales were down 2.2 percent.

A supplementary survey shows that 36 percent of retailers were impacted by trade tensions in April, mostly through higher prices, changes in demand, and disruptions to the supply chain. While sales increased across six of the subsectors, all nine of them felt a negative impact from trade tensions.

E-commerce sales increased 3.6 percent in April, making up 6.2 percent of total retail trade, up from 6.0 percent in March.

With today's data, Econoday's Relative Performance Index, while still indicating an economy performing better than expected, came down to 8.

Forecasters agree with Stats Canada’s advance estimate that sales rose 0.5 percent in April after gaining 0.8 percent in March led by motor vehicle sales.

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.