August 23, 2023 | 09:18
Canadian Retail Sales: A Mixed Bag
Canadian retail sales ticked up 0.1% in June, slightly better than the flat flash estimate previously published by StatCan. However, the details were softer as the increase was driven by a 2.5% jump in autos. Most of the remaining sectors were down, leaving sales ex-autos down 0.8%. The regional picture was also mixed with only four of ten provinces posting increases.
In volume terms, sales were down 0.2% in the month and declined 3.2% a.r. in the quarter. Despite the better-than-expected report, the figures are in line with expectations for a modest GDP decline in June. That would keep growth on track to slow to just over 1% in the second quarter (GDP report out next week).
StatCan’s early estimate calls for a 0.4% increase for July. Recall that goods prices were up only modestly, which suggest sales volumes also rose in the month.
Bottom Line: A better-than-expected retail sales report was supported by autos, which masked weakness in other sectors. GDP looks to be on track for a modest decline in June, slowing the pace of quarterly growth as higher rates continue to bite.