Canadian retail sales rebound in August after a steep drop in July

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Canadian retail sales rose slightly in August, a welcome rebound from the largest decline in more than a year in July.

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Receipts for retailers increased 0.4 per cent in August, Statistics Canada said Friday in Ottawa, according to an advance estimate. That follows a 2.5 percent drop in July, which was the first decline in seven months and the largest since April 2021. Lower sales at gasoline stations and clothing stores led the decline in July.

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Analysts are closely monitoring retail spending to gauge how much consumers may be pulling back as inflation and higher interest rates erode purchasing power. Recent economic data suggest the Canadian economy has already begun to slow down from a strong first half of 2022.

The 0.4 per cent rebound in August still puts retail sales well below its peak in June. Sales in volume terms, meanwhile, remain sluggish, barely changed from year-ago levels.

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For July, sales were down in nine of 11 subsectors, representing 94.5 percent of retail trade. Excluding autos and parts, retail sales decreased 3.1 per cent.

Sales at petrol stations fell 14.2 per cent for the month as petrol prices fell 9.2 per cent and sales at petrol stations in volume terms decreased 7.0 per cent. Sales at clothing and clothing accessories stores dropped 3.3 per cent.

Core retail sales — which exclude gasoline stations and motor vehicle and parts dealers — fell 0.9 per cent.

In volume terms, retail sales fell 2.0 per cent in July.

The median estimate in a Bloomberg survey of economists called for a two percent drop in retail sales for July.

Bloomberg.com

With a file from The Canadian Press

Bloomberg.com

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