Canada: Consumption spending should contribute to growth in Q2 - NBF
National Bank of Canada’s analyst Jocelyn Paquet, point out that Canadian retail sales hit a record high in May and recovered after April’ slide and see numbers consistent with a positive contribution to GDP growth during Q2.
Key Quotes:
“As was expected following a weather-related slump in April, Canadian retail sales rebounded strongly in May, led by a robust showing in the country’s two largest provinces. The monthly advance, which easily surpassed forecasts, even allowed retail sales to reach a new all-time high of C$50.8 billion.”
“Another sign of the strength of Canadian consumers in May, discretionary sales, which excludes gasoline, groceries and health products, spiked no less than 3.0%, more than erasing April’s weak result (-2.4%).”
“Retail sales are now on pace to expand 3.8% annualized in Q2 following a negative print in Q1. Such a performance is consistent with an acceleration of consumption spending and hence GDP growth in the second quarter of 2018.”
“Canadian retail sales easily topped consensus expectations in May, surging 2.0% m/m in nominal term, the most since October 2017.”
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
