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MNI: Canada Nov Retail Sales Set to Fall 0.5% After Oct Gain


Retail sales fell 0.5% in November according to a flash Statistics Canada estimate following a 1.4% October gain held back by the drag of higher interest rates on home furnishings and appliances, in line with forecasts the economy is heading towards a recession next year.

October's gain was led by gasoline and food where prices have been surging, and overall retail sales were unchanged on a volume basis, the agency said Tuesday from Ottawa. While sales rose at most types of stores, furniture and home furnishing sales fell 1% on the month and 5.1% from a year ago. 

A separate report showed that October saw the smallest growth in the value of mortgage lending since June 2020. Transactions slowed for a fifth straight month to growth of 0.4%.

Bank of Canada officials raised the policy rate a half point to 4.25% earlier this month and have signaled they could pause at the next meeting as they become more data dependent. Officials are watching for signs that overheated demand and fragile supply chains are coming back into balance and of indebted households deal with higher rates.

Sales excluding automobiles, parts and gasoline rose 0.9% in October, and excluding autos they rose 1.7%. Economists predicted headline sales to climb 1.5% and ex-autos by 1.3%. 

MNI Ottawa Bureau | +1 613-314-9647 |
MNI Ottawa Bureau | +1 613-314-9647 |

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