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MNI: Canada Retail Sales Choppy in August and September

(MNI) OTTAWA

Canadian retail sales alternated between gains and losses again over August and September, the federal statistics office reported Friday, with weakness in consumer spending that had powered the economy for years adding to evidence of a slowdown as interest rates rise.

Sales rose 0.7% in August led by food stores amid the fastest inflation at those outlets in decades, while a flash September estimate showed a 0.5% decline. Wholesale sales also declined 0.2% in September according to another flash estimate.

The agency also revised its estimates for retailing over June and July to a 0.8% gain and a 2.2% decrease, from initial figures of a 1% increase and a -2.5% fall. 

Bank of Canada officials are seen hiking at least 50bps next week after the Sept. 7 move of 75bps, with Governor Tiff Macklem saying he must protect against rapid inflation becoming entrenched. Officials are watching for signs that overheated demand and supply are coming back into balance, and for strain on households who carried heavy debt loads into the pandemic.

One sign that rates are pinching consumers was StatsCan's reporting Friday that its index of new home prices fell for the first time in almost three years in September with a 0.1% decrease. Year-over-year gains slowed for a sixth month to 6.3%.

MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com

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