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MNI: Canada Nov Retail Sales Stall After Four Prior Gains

Statistics Canada gives report from Ottawa.
Policy NewsHomepageCanadaStoryNorth America
Canadian flash retail sales were "relatively unchanged" in November and the volume of transactions were flat in October, further evidence of disappointing economic growth even as the central bank cuts interest rates. 
 
While the 0.6% gain in headline retail sales for October was close to the 0.7% consensus, excluding autos they rose just 0.1% to lag the expected 0.5%.
 
Sales excluding gas and autos, which some economists see as a more consistent measure consumer demand, rose 0.2% in October. 
 
Five out of nine sub-sectors gained in October. Motor vehicles and parts climbed 2.0%, while the furniture and electronics category gained 2.5%. Food and beverages were the biggest drag for the month, down 0.7%. Gas and fuel sales were also down 0.5%, falling for a sixth straight month.
 
Before November's flattening out, headline retail sales had climbed four consecutive months, coinciding with the start of Bank of Canada interest-rate cuts in June. Governor Tiff Macklem earlier this month said his forecast is based on the view consumer spending will strengthen into next year, while noting that per capita spending showed some earlier weakness. The next rate decision is Jan. 29 and Macklem has said further modest rate reductions can be expected.
 
Spending may see a lift with the government introducing a two-month tax holiday on "essentials" earlier in December, though merchants and shoppers have complained that what items are discounted is confusing. On the downside, consumer confidence may be shaken with some jobs threatened by Donald Trump's pledge to hit Canada with a 25% tariff. Demand could be further weighed down next year as some families face the shock of refinancing five-year mortgages at much higher rates, and the government is shifting to curtail immigration that was boosting the population. Unemployment is also rising. 
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Canadian flash retail sales were "relatively unchanged" in November and the volume of transactions were flat in October, further evidence of disappointing economic growth even as the central bank cuts interest rates. 
 
While the 0.6% gain in headline retail sales for October was close to the 0.7% consensus, excluding autos they rose just 0.1% to lag the expected 0.5%.
 
Sales excluding gas and autos, which some economists see as a more consistent measure consumer demand, rose 0.2% in October. 
 
Five out of nine sub-sectors gained in October. Motor vehicles and parts climbed 2.0%, while the furniture and electronics category gained 2.5%. Food and beverages were the biggest drag for the month, down 0.7%. Gas and fuel sales were also down 0.5%, falling for a sixth straight month.
 
Before November's flattening out, headline retail sales had climbed four consecutive months, coinciding with the start of Bank of Canada interest-rate cuts in June. Governor Tiff Macklem earlier this month said his forecast is based on the view consumer spending will strengthen into next year, while noting that per capita spending showed some earlier weakness. The next rate decision is Jan. 29 and Macklem has said further modest rate reductions can be expected.
 
Spending may see a lift with the government introducing a two-month tax holiday on "essentials" earlier in December, though merchants and shoppers have complained that what items are discounted is confusing. On the downside, consumer confidence may be shaken with some jobs threatened by Donald Trump's pledge to hit Canada with a 25% tariff. Demand could be further weighed down next year as some families face the shock of refinancing five-year mortgages at much higher rates, and the government is shifting to curtail immigration that was boosting the population. Unemployment is also rising.