MNI DATA BRIEF: Canada Flash July Wholesale Sales -2.0%

Canadian wholesale sales fell 2% in July according to a flash government estimate Wednesday, following declines in retail and factory sales that raise questions about the strength of the upcoming monthly GDP report.

Building materials led the weakness, Statistics Canada said Wednesday, and may reflect the crash in lumber prices after an earlier surge. Wholesale sales had declined 0.8% in May following three prior increases. Other flash reports for July have shown a surprising 1.7% decline in retail sales and a 1.2% fall in factory sales, though Canada has reported also a healthy job gain on the month.

The negative output reports suggest the economy may have faltered at the start of the third quarter, a time when health restrictions had been lifted as the delta variant began to take hold. The BOC is counting on a consumer-led recovery to boost the economy in the second half, and investors had predicted the central bank would end net bond purchases around yearend. (See: BOC to End Active QE Before Rate Hike-Ex-Adviser)