- Retail sales inched up 0.1% in April
- Excluding price-effects, sale volumes edged down 0.2% after stronger gains the prior two months
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. Labour markets have remained very strong. The unemployment rate hit another new cycle-low in May. The pullback in interest rates in Canada and abroad in recent months mean that household debt payments won’t likely increase as much as has been previously feared this year or next. 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.
