MNI: Canada Dec Retails Rise Fastest In Two Yrs Amid Tax Break

Canadian retail sales wrapped 2024 on a high note with the flash December estimate showing the fastest growth since January 2023 as the announcement of a sales-tax holiday for that month appeared to pull sales from a flat November. 

Statistics Canada said Thursday its early reading showed a 1.6% sales increase in December, following a flat November that lagged the economist consensus for a 0.6% increase. The federal government on Nov. 21 announced that a two-month sales tax break would begin on Dec. 14. 

Sales picked up in the second half of 2024 as the Bank of Canada embarked on 175 basis points of interest-rate cuts starting in June. Investors expect the Bank to cut another quarter point to 3% on Jan. 29 amid slack in the economy and slower inflation. That backdrop may be roiled a few days later with Donald Trump threatening a 25% tariff as soon as Feb. 1. 

Retail sales in November saw six out of nine sectors falling led by food and beverages that dropped 1.6%. Autos and gas largely offset the decline, rising 2% and 0.7% respectively.

Excluding autos and parts, sales in November fell 0.7% compared with a consensus for a 0.1% increase. After excluding gasoline as well, core sales fell 1%, the largest decline in six months. 

In a separate report, StatsCan said the number of people receiving unemployment benefits fell 0.9% in November but were up 3.2% from a year earlier.