Retail sales driven by higher gasoline prices in June
Higher prices Canadians paid at the gasoline pumps in June pushed overall retail sales across the country up by 0.5 per cent for the month to $36 billion, Statistics Canada said Wednesday.
The figure matched economists' expectations.
Statistics Canada said the June increase was mainly due to a 4.2 per cent hike from May in sales at gasoline stations. After factoring out price fluctuations for all goods and services, retail sales in constant dollars decreased by 0.4 per cent.
Sales in the clothing and accessories sector grew by 3.5 per cent month-over-month, while food and beverage sales were up 1.3 per cent.
Faltering truck sales led to a 3.1 per cent drop in retail purchases at new car dealerships in June, marking the fifth straight month of declines.
Excluding auto purchases, retail sales rose by 1.4 per cent nationwide in June.
"Canadian consumers are reeling it in after a couple years of very powerful activity," said BMO Capital Markets economist Douglas Porter. "Softer job conditions, a cooling housing market, still-high gas prices and a raft of dire headlines have hammered consumer confidence, pointing to more modest spending growth in the months ahead."
"Even so, the outlook remains less downbeat than that facing the ultra-stressed U.S. consumer," he said.
He pointed out that retail sales in Canada from April to June grew at annualized rate of six per cent, compared to 5.6 per cent in the United States, where government stimulus cheques provided a boost to spending.
"While spending on home furnishings and other household durables was resilient in June, the housing market is now showing clear signs of slowing and this will feed through to spending on household items," said TD Bank economist James Marple. "Moreover, the fall in employment in July gives little reason to expect a rebound in retail sales in the months ahead."
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