| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.6% | 0.5% to 0.6% | 0.5% | 0.9% |
| Year over Year | 3.7% | 3.4% |
Highlights
Household spending momentum weakened in April, as expected, with the value of Canadian retail sales up 0.5 percent on the month after rising 0.9 percent in March. Forecasters in an Econoday survey had expected sales to expand 0.6 percent on the month. Sales were up 3.7 percent year-over-year.
Preliminary data point to a further 1.0 percent increase in May.
The growth slowdown in April occurred against the backdrop of accelerating inflation, as the CPI was up 2.8 percent year over year in April, up from an increase of 2.4 percent in March.
There were several signs of softening consumer demand. Adjusting for the price effect, retail sales were flat in April. What's more, the nominal increase was concentrated in five of nine subsectors, led by a 5.1 percent gain in gasoline and fuel and a 1.7 percent increase in motor vehicles and parts. Excluding these two categories, core sales actually contracted 0.7 percent, marking a second consecutive decline.
The decline in core sales was led by a 2.0 percent contraction in food and beverage and a 1.7 percent decrease in general merchandise.
By contrast, housing-related sales were up, with building material and garden equipment and supplies rising 3.3 percent and furniture, and home furnishings, electronics and appliances increasing 0.7 percent.
Regionally, sales increased in six provinces.
Retail e-commerce sales decreased 1.2 percent on the month, representing 7.0 percent of total retail trade, down from 7.1 percent in March.
Market Consensus Before Announcement
Forecasters agree, as usual, with Statistics Canada’s preliminary forecast calling for an increase of 0.6 percent in nominal terms for April from March, presumably with a boost from rising fuel prices.
Definition
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.
Description
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.