Canadian retail sales rose 0.2% in September and were 3.8% higher than a year earlier. Sales in September would have been even stronger had gasoline prices not fallen so sharply. Excluding auto sales, retail sales were up at a 4% y/y pace in September.
In September, sales rose in 6 of the 11 broad categories, including food and beverages (+0.9%), general merchandise (+1.2%), miscellaneous items (+0.9%) and motor vehicles/parts (+0.5%).
Note that sales of building materials and furniture were down in both August and September, reflecting the slowing down of the real estate sector in Canada.
In sum, the September retail sales data paint a picture of a resilient consumer spending in Canada, particularly after the impact of falling gas prices are removed from the picture.
Nonetheless, the housing-related sectors, such as furniture/home furnishings and building materials have displayed persistent weakness since mid-year.
With the serious challenges facing the oil patch firms and assuming the economy’s growth rate will not be too strong in Q3, the Bank of Canada is not expected to raise interest rates at its December 5th meeting.
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