The Canada Core Retail Sales Index is a critical economic indicator that represents the volume and value of sales in the country’s retail sector. This index is calculated based on retail store revenues, excluding some non-fundamental factors, to provide an accurate measure of economic growth and consumer spending trends.
The Canada Core Retail Sales Index improves on this measure by excluding sales from sectors with large price fluctuations, such as fuel and automobiles, to better reflect actual consumer demand. This index includes a wide range of economic sectors, including food and beverages, clothing, household appliances, electronics, books, magazines, sports equipment, toys, gifts, jewelry, cosmetics, medical and health products, and others.
As a leading indicator of the health of Canada’s economy, the Core Retail Sales Index provides insights into consumer spending patterns, indicating the economy’s strength and growth. This indicator is especially valuable for investors and Forex traders, as it helps them evaluate market trends and make sound financial decisions.
The higher-than-expected release of Canada’s core retail sales index indicates increased consumer spending, leading to higher demand for goods and services in the Canadian market. This indicates a strong and active economy, and will likely boost the value of the Canadian dollar in the forex market. Conversely, a lower-than-expected core retail sales index indicates lower consumer spending, indicating a weaker economic situation that may lead to a decline in the value of the Canadian dollar in the forex market.
The Canada Core Retail Sales Index is issued by the Canadian government agency Statistics Canada. This agency collects and analyzes economic, social and demographic data in Canada, and provides reports and statistics related to this data.
Canada’s Core Retail Sales Index: Impact on Forex and the Economy
The release of Canada’s core retail sales index greatly affects the performance of the Canadian dollar in the Forex market. This index measures the volume and value of consumer spending across the country. Overall, a rise in the index indicates increased consumer spending, which could strengthen the value of the Canadian dollar. Conversely, a decline in the index can negatively affect the value of the currency.
When Canada’s core retail sales index exceeds expectations, it indicates strong consumer spending and a strong economy. This increased demand for goods and services can cause the value of the Canadian dollar to rise in the forex market
Conversely, if the core retail sales index is below expectations, this indicates lower consumer spending and a possible weakening of the economic situation. A decrease in demand for goods and services usually causes a decrease in the value of the Canadian dollar in the Forex market.
The Canada Core Retail Sales Index, a vital economic indicator for assessing consumer spending trends, is meticulously prepared and published by the esteemed government institution, Statistics Canada. Tasked with collecting and analyzing comprehensive economic, social and demographic data, Statistics Canada is the official source of information for government agencies, academic institutions, local and international communities, businesses and individuals alike.
With an unwavering commitment to accuracy and reliability, Statistics Canada ensures that the Core Retail Sales Index is updated promptly on a monthly basis, typically approximately 50 days after the end of the reporting month. This invaluable metric, essential for making informed decisions, is publicly disclosed on the Statistics Canada website and is covered extensively across various media channels across the country.
Mark your calendars for the upcoming release of the Core Retail Sales Index, scheduled for April 24, 2024, when we expect another insight into Canada’s economic landscape.
Canadian consumer spending declined in February
Canadian consumer spending saw a notable contraction in February, marking its largest decline in nearly a year with little sign of recovery since the start of 2024. Statistics Canada’s preliminary assessment reveals that retail transactions remained stagnant in March, after a marginal decline of 0.1 percent in February. different from growth expectations. These numbers, coupled with a 0.3% decline in January sales, represent a weak performance throughout the first quarter of the year, reflecting the slowest pace observed since the second quarter of 2023.
The repercussions of this report have affected financial markets, as evidenced by a three basis point decline in the two-year Canadian government bond yield, to settle at 4.25 per cent. Meanwhile, the Canadian dollar showed a modest decline of approximately 0.3% against the US dollar, reaching $1.372 per US dollar as of 9:08 a.m. Ottawa time. The decline in February was mostly due to lower sales at gas stations, although car sales saw a slight increase. However, excluding these sectors, core retail sales showed stagnation, particularly in discretionary categories such as apparel, accessories and sporting goods.
In terms of volume, retail sales saw a 0.3% decline in February. Excluding automobile transactions, retail sales also saw a decline of 0.3%, less than the expected rise of 0.1%, with the previous month’s growth figures revised down to 0.4%.
In February, a significant and widespread decline was observed, surpassing the previous month’s challenges, noted Maria Solovieva, an economist at Toronto-Dominion Bank. Despite this general weakness, the automotive sector showed resilience, representing a positive recovery from previous declines. Solovieva highlighted strong spending trends in March, based on the bank’s internal data.
Retail sales fell with multiple sectors declining in March.
Retail sales fell 0.2% to $66.4 billion in March. Sales declined in seven of nine subsectors and were led by declines in furniture and home furnishings and electronics and appliance retailers.
Core retail sales – which exclude gas stations, fuel retailers and auto and parts dealers – fell 0.6% in March. In terms of volume, retail sales fell 0.4% in March.
Retail sales decreased by 0.2% in the first quarter, while retail sales by volume increased by 0.3%.
Core retail sales fell 0.6% in March. This was the first decline in core retail sales in four months. The decline was broad-based with sales falling in all but one core retail subsector.
Lower sales were reported at retailers of furniture, home furnishings, electronics and appliances (-1.6%) and in apparel, clothing accessories, shoes, jewelry, luggage and leather goods (-1.6%).
Revenue also declined at food and beverage retailers (-0.4%) and sporting goods, hobby, musical instruments, books, and miscellaneous retailers (-1.5%).
Building Materials and Garden Equipment & Supplies Dealers (+1.3%) was the only primary retail sector to report an increase in sales in March.
Sales increase at automobile and spare parts dealers. The largest increase in retail sales in March was observed at automobile and spare parts dealers (+1.0%), rising for the second month in a row. These gains were due to an increase in sales at new car dealers (+1.1%). The only decline in this sub-sector came from used car dealers (-2.0%).
Sales at petrol stations and fuel vendors fell (-0.7%) in March. In terms of volume, sales at gasoline stations and fuel vendors fell by 1.7%.
