Canada’s Dec retail sales: Can they keep up the stellar run again? – Scotiabank

Analysts at Scotiabank provide their thoughts on the Canadian retail sales data for December due to be reported at 1330 GMT today.

Key Quotes:

“Retail sales have been on a stellar run again. Can they keep it up in December's estimate on Thursday?

The dollar value of sales has been on a solid growth trend and November's 1.6% m/m gain was the biggest since the start of last year and one of the biggest months over time. I'm going with a small gain this time but it would require continued strength outside of auto sales volumes and gas prices and there is always the caution that the retail sales growth estimate is largely a crap shoot.

Gasoline prices and our estimates of seasonally adjusted auto sales fell in December. Indeed most of the December rise in headline retail sales was due to higher prices as the volume of retail sales grew by only 0.3% m/m and had its shining moment the month before during October.

Pending December's estimate, sales volumes were tracking about 5% higher in q/q seasonally adjusted and annualized terms. That reversed the prior quarter's soft spot to restore a solid growth trend 

Income growth is the main driver now with the massive increase in child benefit payments still supporting the level of sales.”