Nathan Janzen, the senior economist at Royal Bank of Canada (RBC), notes that the Canadian retail sales fell 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.”