Canadian Retail Sales Disappoint
The Canadian dollar took a hit following a raft of disappointing economic data. The Loonie is feeling pressure from underwhelming fourth quarter retail data and disappointing fourth quarter U.S. gross domestic product (GDP) numbers fell to a two-week low against the greenback. One Canadian dollar is now worth around USD$0.75. At the end of January, the Canadian dollar was trading near USD$0.75.
Canadian retail sales surprised investors after posting their worst performance in nine months in December. The decrease ends four consecutive months of gain in the retail sector and comes at a time of tepid wage gains and record household debt levels.
In December, Canadian retail sales fell 0.5% month over month to a seasonally adjusted $44.91 billion. Economists expected Canadian retail sales to remain unchanged from November’s gain of 0.3%.1
The decline was broad-based with nine out of 11 sectors posting lower sales. The biggest sales—autos, which account for around 25% of total retail sales—were down by nine percent. Even if you exclude auto sales, overall retail sales were still down 0.3% in December.
A pullback in consumer spending results in a decline at health and personal care stores (-4.1%), clothing stores (-3.7%), electronics and appliances (-2.3%), and liquor stores (-3.6%). The only areas to report increases were building materials (0.7%) and sales as gas stations (6.6%).
Fourth-Quarter U.S. GDP Disappoints
The Canadian dollar is also feeling pressure following disappointing fourth-quarter U.S. GDP data. Fourth-quarter GDP advanced 1.9%. Economists expected the U.S. economy to advance 2.1% in the fourth quarter.2
The miss comes despite stronger than expected consumer spending. Consumer spending advanced 3.0% in the fourth quarter. It was previously reported to have increased 2.5%. This is an important metric as U.S. consumer spending accounts for more than 70% of GDP. Still, GDP was weighed down by exports, business investment, and state and local government spending.
The U.S. economy grew just 1.6% in fiscal 2016, its worst performance since 2011. In 2015, U.S. GDP grew 2.6%. On the campaign trail, Donald Trump promised that, if elected, he would steer the U.S. economy to four percent annual GDP growth.
Learn-To-Trade.com—Toronto’s Leader in Stock Market Trading Courses
Will Canada’s retail numbers continue to underwhelm or will they rebound in early 2017? Will the U.S. economy pick up steam under President Trump’s economic policies?
Whether they do or not, there are proven strategies that can help investors to profit no matter what the economy and broader markets are doing. The key is to know how to read the markets.
Learn-To-Trade.com is Canada’s oldest and leading provider of stock market trading courses. Led by licensed, industry professionals, Learn-To-Trade.com’s stock market trading course teaches investors how to trade more confidently and profit consistently.
Through Learn-To-Trade.com’s stock market trading course you will learn how to read stock charts, understand fundamentals, risk management, and capital preservation. You will also learn about stock options, stock index trading, futures trading, commodities trading, futures option trading, and FOREX (currency) trading.
Learn-To-Trade.com also has a unique Lifetime Membership that allows you to re-attend any part of the program as often as you’d like.
To learn more about Learn-To-Trade.com’s stock market trading course, contact us at 416-510-5560 or by e-mail at firstname.lastname@example.org.
- “Retail trade, December 2016,” Statistics Canada, February 22, 2017; http://www.statcan.gc.ca/daily-quotidien/170222/dq170222a-eng.htm.
- “National Income and Product Accounts Gross Domestic Product: Fourth Quarter and Annual 2016 (Advance Estimate),” Bureau of Economic Analysis, February 28, 2017; https://www.bea.gov/newsreleases/national/gdp/2017/gdp4q16_adv.htm.
Latest posts by George Karpouzis (see all)
- Market Review – November 2019 - November 13, 2019
- Canadian Economy to Slow in 2020 as Global Manufacturing Recession Takes Hold - November 12, 2019
- Bank of Canada Holds Rate Steady Despite Gloomy Economic Outlook - November 5, 2019