Canadian retail sales rose slightly in August, a welcome rebound from the largest decline in more than a year in July.
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 per cent 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.
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.
The statistics agency didn’t provide details of the August number, which is based on responses from 51.1 per cent of companies surveyed. The agency said the number would be revised.
Bank of Canada says inflation headed in right direction but still too high
Wage hikes not keeping up with inflation amid record-high job vacancies
Inflation tops list of concerns for Canadian businesses in third quarter: survey
Sales were down in nine of 11 subsectors in July, representing 94.5 per cent of retail trade. Excluding autos and parts, retail sales decreased 3.1 per cent.
Sales at gasoline stations fell 14.2 per cent for the month as gasoline prices fell 9.2 per cent and sales at gasoline 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 per cent drop in retail sales for July.
Bloomberg.com with a file from The Canadian Press