Nathan Janzen, a senior economist at the Royal Bank of Canada, notes that the Canadian retail sales inched up 0.1% in April and 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.
• 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.”