MNI: Canada Retail Sales Show Resilience With April Rebound

Canadian retail sales showed resilience against market bets for a recession this year with a flash estimate pointing to a rebound in April's headline figure while "core" sales climbed a fourth straight month in March.

Total sales for April rose 0.2% according to Statistics Canada's flash estimate released Friday.

The agency's official reading for March showed a 1.4% decline but excluding a 4.4% fall at auto and parts dealers and a 3.9% decline at gas stations core sales climbed 0.3%, the fourth consecutive gain. 

Another sign of strength was that even with the March decline following February's 0.2% fall, the January gain of 1.4% was still enough to lift first-quarter sales 0.7%. On a volumes basis that's more closely tied to GDP sales rose 1.2%. 

That first quarter strength is remarkable because it came as the Bank of Canada raised interest rates for the eight straight time in January, the toughest tightening campaign in decades. Governor Tiff Macklem said Thursday he's still assessing whether he's done enough to bring inflation back to target, and some investors are betting he could hike at the June 7 decision. 

Some of the weakness in March auto sales is also likely linked to delayed production of new cars amid a chip shortage, instead of a lack of demand. Dealers in Ottawa have reported delays of up to two years on some models. The March sales decrease was also somewhat narrow, covering five of nine industries worth about 55% of total sales. 

One note of caution: Statistics Canada's flash April estimate was based on a below average response rate of 38% caused by fewer data collection days than usual. Friday's report didn't break down what industries led the April increase.