MNI: Canada March Retails Flat After Feb Decline Led By Gas
Retail sales were unchanged in March according to a Statistics Canada flash estimate after falling 0.1% in February, a sign consumer spending is dampening after a stretch of unexpected strength.
While the March advance estimate didn't come with an industry breakdown, February's 0.1% fall was led by gasoline stations that decreased by 2.2% on the month and by 3.9% in volume terms. Durable goods, such as furniture and appliances, also contributed to the decrease as sales were down 2.4% from a year ago and 1.5% on the month. February's decrease reported Wednesday from Ottawa was unexpected as Statistics Canada's prior estimate had sales rising 0.1%.
Countering the decline across five of nine sub-sectors was motor vehicles and parts dealers that saw a 0.5% gain in sales after a decline in January. Excluding autos, retail sales decreased 0.3%.
After removing price changes, the volume of sales fell by 0.3% in February. That measure is a closer indication of the contribution to gross domestic product.
Statistics Canada revised down their November and December headline figures, a sign that weakness was underestimated at the end of last year. The November figure was revised to a 0.1% decrease after initially being reported as unchanged while the December increase was lowered by 0.3 percentage points to 0.6%. The revisions suggest that retail sales were flat in the first quarter.
In a separate report, flash manufacturing fell 2.8% in March.
The data support the Bank of Canada's view that its 10 interest-rate hikes are slowly taking the economy into excess supply. The Bank is waiting on several more reports to show that the recent progress back to the inflation target is sustained before the next decision in June, where many investors expect a rate cut.