| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.4% | 0.4% to 0.4% | 0.6% | 1.0% | 1.1% |
| Year over Year | 5.2% | 5.9% | 6.1% |
Highlights
Canada retail sales expanded a further 0.6 percent in June, more than the 0.4 percent consensus expectation in an Econoday survey, for a 12-month increase of 5.2 percent.
Also reflecting consumer resilience, the sales volume rose 1.5 percent on the month.
In the second quarter, retail sales were up 2.2 percent. Volumes, more relevant to real GDP, rose 0.4 percent, roughly amounting to an annualized pace of 1.6 percent. The Bank of Canada projected a 1.7 percent annualized household consumption growth in the second quarter, and today's retail sales report supports this outlook. Consumption per person is projected to increase 1.9 percent before slowing down to 1.3 percent in the third quarter.
The value of sales excluding a 1.0 percent increase in motor vehicle and parts was up 0.5 percent in June from May. When also excluding gasoline and fuel, which fell 4.1 percent, core sales were up 1.2 percent.
Preliminary data point to a 0.8 percent total sales contraction in July.
In June, sales gains were widespread across seven of nine subsectors, led by a 2.7 percent growth in general merchandise. Sales of clothing, clothing accessories, shoes, jewelry, luggage and leather goods were also robust with a 3.1 percent monthly increase. Among core sales, food and beverage was the only category to report a decline, of 0.4 percent.
Regionally, sales were up in seven provinces, led by Ontario.
E-commerce sales increased 9.9 percent in June, accounting for 7.7 percent of total retail trade, up from 7.1 percent in May.
Market Consensus Before Announcement
Forecasters agree with Statistics Canada’s preliminary estimate calling for a 0.4 percent increase for June from May.
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.