Canadian retail sales dropped in September. On a sequential basis, the retail sales fell 0.1 percent, after an upwardly revised 0.1 percent uptick in August. Today’s print was above median consensus forecast of a fall of 0.3 percent. The picture stayed the same after excluding the price impacts, with volumes also falling 0.1 percent on a sequential basis.
Out of 11 major categories, sales fell in six of them. Lower sales at motor vehicles and parts dealers and gasoline stations mainly drove the majority of the fall. However, increased sales at food and beverage stores and building material and gardening equipment stores provided some offset.
Region wise, sales dropped in seven of the 10 provinces. Lower sales in Alberta, New Brunswick and Manitoba were responsible for the fall in the headline print. Meanwhile, Quebec and Ontario recorded some rise, providing some offset. Sales in British Columbia dropped a modest 0.2 percent.
The momentum of retail sales has continued to rebound, with volumes rising 0.5 percent in the third quarter, noted TD Economics in a research report.
“The ongoing strength in Canadian labour markets, the recent momentum in housing markets and wages, and the downshift in borrowing rates may have provided a modest lift to consumer spending. Still, elevated household debt levels and associated debt-servicing costs will continue to cap any meaningful acceleration in retail sales or consumer spending”, added TD Economics.
