Canada: Retail sales point to slow but steady growth in household spending - RBC

Nathan Janzen, senior economist at the Royal Bank of Canada, notes that the Canadian retail sales inched up 0.1% in April and excluding price-effects, sale volumes edged down 0.2% after stronger gains the prior two months.

Key Quotes

“The volume of retail sales did edge lower in April but that was the first dip in three months.   Looking through monthly wiggles, sale volumes were still up 1.2% versus their Q1 average and 2.2% from a year ago.  That year-over-year rate is admittedly modest, but nonetheless the highest since September of last year.”

“We still expect consumer spending growth to remain relatively unimpressive – housing markets have stabilized, but an earlier boost to household purchasing power from rapid home price appreciation won’t likely be repeated, and the household saving rate is already very low.”

“The more pressing risk to the economic outlook at the moment, though, remains for a potential escalation in the US-China trade spat to generate more significant negative spillovers to the Canadian industrial sector.”