Nathan Janzen, senior economist at Royal Bank of Canada, notes that the Canadian retail sales declined 0.1% in May and excluding prices, sales were down 0.5%.
“The details of the May report don’t look quite as soft as the headline. Most of the month-over-month decline was attributed to an unusually large 2.0% drop in food & beverage store sales that will probably reverse at some point. Sales increased in 7 of 11 subsectors – including another sizeable monthly rise in sales at furniture stores. That latter increase probably has something to do with stabilization in housing markets in recent months.”
“To be sure, overall retail purchases have still been on the soft side. Sale volumes were down 1% from a year ago and are tracking little if any increase in Q2 from Q1. But other developments have arguably been more favourable for the near-term household spending outlook.”