Canadian Consumer Spending Feels The Pinch Of High Energy

Daily Forex Fundamentals | Written by DailyFX | Jul 22 08 13:03 GMT |

Canadian Retail Sales (MAY) (Sales) (ex Autos) Actual: 0.4% 0.4% Expected: 0.6% 0.7% Previous: 0.6% 1.2% (R+) Though its economy is still running strong, Canada's consumers are still feeling the impact of rising energy prices, steady inflation and the jump in credit costs. Statistics Canada reported retail sales through the month of May rose at a more restrained pace than economists had expected. A 0.4 percent pickup in the headline spending indicator fell short of the market's 0.6 percent official consensus and an increase of the same magnitude from last month. When auto sales were excluded, the consumption report still rose 0.4 percent against a 0.7 percent forecast and 1.2 percent, upwardly revised improvement from the period before. Looking into the components of the indicator, it was clear that much of the strength in the indicator was a component of price and not demand. Gas station reciepts were the greatest contributor the overall report with a 2.4 percent jump after May's 2.2 percent increase - as global prices for necessary goods were hitting record highs. With the help of the gasoline figure, autos rose 1.1 percent. On the other hand, food and beverage sales were unchanged even as global prices were still elavated. Elsewhere, discretionary building supplies and furniture/eletronic sales actually improvemed - by 0.7 percent and 0.3 percent respectively. Showing some signs of a frugal consumer though was the 0.7 percent slip in clothing sales - a modest decline following the 2.7 percent surge in the previous period. Overall, these indicators hold little surprise and are not that disappointing. Discretionary spending was likely to reflect rising prices and turning employment and wage trends. However, considering Canadians are still buying building materials and durable goods, the economy is still far from the position that the US is in. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.