Canadian retail sales grow for third straight month in November

Canadian retail sales extended gains in the month of November. Sales rose 0.2 percent, rising for the third consecutive month. In real terms, sales rose 0.3 percent. Sales grew in around half of the major industries, driven by electronics and appliance stores and gasoline stations, the latter of which was boosted by higher prices. Meanwhile, sales dropped in motor vehicle and parts dealers provided some offset.

Region wise, the picture came in mixed, with sales rising in half the provinces. Quebec saw a rise of 0.9 percent. Gains were also seen in Ontario and Manitoba. Sales in Saskatchewan and in Alberta dropped, while B.C recorded unchanged retail sales.

The growth in retail sales volumes in October and November imply that sales would be up in the fourth quarter as a whole, noted TD Economics in a research report. This augurs well for overall consumer spending and by extension, economic growth in the quarter.

Consumer spending is expected to remain a key source of strength for the Canadian economy, especially in light of the recent gains in employment and wages. However, recent interest rate rises would likely serve to keep consumer spending in check, stated TD Economics.

The report released today adds to the economic scenario that the data dependent Bank of Canada is watching as it determines its next move.

“While it is supportive of higher interest rates, the tightening cycle is likely to be slow and gradual, giving the Bank time to assess the impact of higher rates and other uncertainties such as the new B-20 guidelines and any changes to NAFTA”, added TD Economics.

At 16:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral 35.1494, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -146.992. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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