MNI DATA IMPACT: Canada Wholesales Post 1st Decline Since Apr

Canadian wholesale sales fell 1.3% in December, the first decline since April, which may reflect a regular economic cycle rather than the second Covid-19 wave the central bank says will shrink GDP early this year.

Autos and parts sales fell for a second month, down 4.3% to the lowest level since July, and sales excluding that sector were down a more modest 0.7%, Statistics Canada reported Friday.

Overall sales remained 3% higher than before the pandemic, with the CAD66.5 billion in total receipts the third highest on record.

"Despite provincial governments' increased restrictions on business activity in December, the drop in the sector was consistent with previous monthly fluctuations," Statistics Canada's report said. "In 2019, for example, the average monthly movement was plus or minus 1.2%, and no individual month moved more than 1.7% one way or the other."

The Bank of Canada predicts the economy grew at a 4.8% annualized pace in the fourth quarter and will contract 2.5% this quarter, reflecting local government lockdowns that are starting to lift now.

Sales fell 1% last year, the first decline since 2009, around when Canada had a recession. Almost all of the weakness came from a 14% drop in the second quarter.