Higher gas prices prop up retail sales through September, StatCan finds

Marco Green
November 23, 2017

A 2.8 per cent decline in sales of clothing and accessories also weighed on overall retail sales. The central bank raised rates in July and September on strong growth. Market expectations were for a 0.9% gain, according to economists at Royal Bank of Canada.

There was little reaction to lackluster retail sales data this morning.

"This is a broadly disappointing report", said Derek Holt, economist at Bank of Nova Scotia, "and adds to the list of reasons for the Bank of Canada to be on hold for an extended period". For the third quarter, retail sales increased from the previous three-month period by 1.8% on an annualised basis.

Economists are estimating annualized third-quarter growth of 1.8 percent, down from 4.5 percent in the second quarter.

"The unseasonably mild weather in the Fall this year delayed the timing of purchases of winter apparel", Nick Exarhos, a senior economist with CIBC Economics, wrote in a report.

Gasoline sales climbed for the second straight month in September, rising 2.6 percent, as supply disruptions caused by Hurricane Harvey in the United States lifted prices at the pump.

Sales volumes came in even worse, declining by 0.6% on the month, however data for August's sales number saw an upward revision to a smaller drop of just 0.1% from the originally reported 0.3% decrease.

Sales at stores associated with home purchases were one source of strength in September, with building material and garden equipment sales up 2.6 percent, while furniture purchases increased by 2.3 percent.

Weighing on the results was a 0.5% drop in motor vehicles and parts, to C$13.09bn.

Excluding vehicles, retail sales grew 0.3%.

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