Retail sales started the fourth quarter on a weaker footing than expected with a 0.2 percent monthly decline in October on the back of a downwardly revised 0.9 percent decrease in September. Volumes contracted 0.6 percent, signaling tweaker activity dragged the performance.

The advance estimate for November points to a 1.2 percent rebound.

In October, sales excluding motor vehicles and parts were down 0.6 percent. When also excluding gasoline stations and fuel, core sales decreased 0.5 percent.

Gasoline and fuel receipts were down 0.8 percent, while sales of motor vehicles and parts increased 0.6 percent.

In October, while the economy created far more jobs than expected, with employment up 66,600, full-time employment, considered a better reflection of the underlying strength, was down 18,500. The Bank of Canada stressed in its December 10 policy statement that job markets in trade-sensitive sectors remain weak and economy-wide hiring intentions continue to be subdued. It is sticking to the outlook it presented in its October Monetary Policy Report: weak growth in the fourth quarter. Today's report does fit in the BoC's outlook, which means it is unlikely to derail the BoC from the current pause in interest rate cuts, while not supporting a tightening either. The central bank has signaled it would take a material change to its outlook for any policy adjustment.

Four sectors drove retail sales down on the month, led by a 2.0 percent drop in food and beverages against the backdrop of elevated grocery prices despite their deceleration in October. Health and personal care sales were down 0.3 percent, and gasoline and fuel declined 0.8 percent. Clothing, clothing accessories, shoes, jewelry, luggage and leather goods sales decreased 07 percent.

Housing-related sales increased, with building material and garden equipment and supplies up 0.6 percent and furniture, home furnishings, electronics and appliances up 1.1 percent.

Regionally, sales declined in four provinces, led by Quebec.

E-commerce sales decreased 0.3 percent to C$4.1 billion in October, accounting for 6.0 percent of total retail trade.

The consensus sees sales unchanged in October from September, in line with the preliminary estimate.

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.