Canada: Retail spending accelerating on a year-over-year basis - NBF

Canadian retail sales rose +0.1% in April. Kyle Dahms, an analyst at the National Bank of Canada, points out that discretionary sales continue to rise on a yearly basis in April.

Key Quotes:

“April’s retails sales report came in slightly below expectations. However, recall that the month of March was quite strong, and it was subsequently upwardly revised, not a terrible backdrop for this mornings’ meager increase for headline sales. In April, higher gasoline prices contributed to the advance as consumer outlays excluding gas stations receipts were flat in the month. Discretionary sales, for their part, were flat in the month – after a +0.9% increase in the prior—but now stand at +4.7% year on year.”

“Looking at the data in volume terms suggests the retail sector will detract from April’s GDP (the latter is due to come out next Friday). That being said, we remain more positive on a quarterly basis. The strong handoff from March will provide some lift in the second quarter and stronger prints for May and June are likely given the strong labour market in 2019.”