Canadian retail sales increased by a modest 0.2% in June, meeting expectations but continuing a trend of tepid growth, Statistics Canada said Friday..
The gain was driven by higher sales at new car dealerships, helped by an extra selling day in the month compared with June 2022. Sales at gasoline stations also rose, reflecting higher prices at the pump. However, these increases were partially offset by declines in sales at other types of stores, including furniture and home furnishings, clothing and accessories, and electronics and appliances..
Excluding autos, retail sales were flat in June. Core retail sales, which exclude both autos and gasoline, rose by a meager 0.1%..
On a year-over-year basis, retail sales were up by 3.1% in June. However, this growth was largely due to higher prices, as the volume of goods sold actually declined by 0.3%..
The June retail sales data align with other recent indicators suggesting that the Canadian economy is slowing down. Consumer confidence has declined in recent months, and the Bank of Canada has raised interest rates in an effort to curb inflation. Businesses are also facing challenges, with many reporting labor shortages and supply chain disruptions..
The retail sector is particularly sensitive to economic conditions, as consumers tend to reduce their spending when they are feeling uncertain about the future. The tepid growth in retail sales in recent months is therefore a sign that Canadian consumers are becoming more cautious..
Here is a more detailed breakdown of the retail sales data:.
* **New car dealers:** Sales increased by 3.1% in June, helped by an extra selling day in the month..
* **Gasoline stations:** Sales rose by 4.7%, reflecting higher prices at the pump..
* **Furniture and home furnishings:** Sales declined by 1.3%..
* **Clothing and accessories:** Sales fell by 0.3%..
* **Electronics and appliances:** Sales decreased by 0.7%..
Overall, the June retail sales data are a mixed bag. While the headline number met expectations, the underlying trend is one of tepid growth. This suggests that the Canadian consumer is becoming more cautious, which is likely due to a combination of factors including rising interest rates, inflation, and economic uncertainty..
The full report from Statistics Canada can be found here: https://www150.statcan.gc.ca/n1/daily-quotidien/230812/dq230812a-eng.htm.
