Retail sales rise in July, reversing last month's unexpected decline
Sep 24, 2013 / 4:54 pm
OTTAWA - Retail sales rose in July after disappointing numbers last month, suggesting consumers are feeling more confident and that the economic recovery remains on track.
"With all of the key monthly data now in hand, it looks like the Canadian economy did indeed bounce back in July," said Robert Kavcic, a senior economist at the Bank of Montreal.
Sales were "a tad softer than expected" when it came to volumes, "but, when combined with strong monthly readings in manufacturing and wholesale, the result is enough to leave real GDP on track for a rebound of about 0.5 per cent in July," he said.
Statistics Canada said Tuesday that retail sales were up 0.6 per cent in July to $40.3 billion.
The increases were led by higher sales at gasoline stations, but gains were reported in eight of the 11 subsectors, representing 52 per cent of total retail trade in July.
Sales at gasoline stations rose 3.2 per cent on higher prices at the pumps and greater volumes, while the clothing and general merchandise sectors also posted increases. Sales of motor vehicles and parts, however, saw the first decline since December 2012. Grocery and electronics stores also posted decreases.
Sales have been trending upwards since the beginning of 2013, the agency said, while in terms of volume, retail sales increased 0.5 per cent in July, the fourth increase in five months.
The gains were broad-based and "a tick stronger than the street's call," CIBC Economist Emanuella Enenajor said in a note to clients.
"With the economy springing back to life after Juneâ€™s steep drop in activity, itâ€™s no surprise to see shoppers back at the stores," she said.
"But while Julyâ€™s 0.5 per cent increase in retail volumes adds to the good news for the monthâ€™s GDP reading, it doesnâ€™t fully offset Juneâ€™s losses, leaving consumer spending in the Q3 off to a slower start than Q2â€™s barnburner pace."
Ontario and Quebec had the strongest showings, while Albertaâ€™s mere 0.1 per cent increase suggests the â€œbounce backâ€ after this summer's floods in Calgary may not have been as great as expected, Enenajor said.
Sales in Ontario and Quebec â€” Canada's two most populous provinces â€” led the advance after weak June results.
"Sales have been choppy in recent months, in part due to severe flooding in Alberta and a construction strike in Quebec that appeared to disrupt activity in June," said RBC economist Nathan Janzen.
But the July bounce-back, coupled with the positive wholesale and manufacturing numbers as well as an end to the construction strike suggest consumer spending will grow "at a respectable rate of close to two per cent in the third quarter," he added.
In June, retail sales fell an unexpected 0.6 per cent to $40.1 billion, or 1.2 per cent in volume terms , partly reversing May's 1.8 per cent surge. It was also a bigger drop than the 0.4 per cent decline that economists had forecast.
Read more Business News
|QHR Technologies Inc||1.28||+0.09|
|Anavex Life Sciences||0.38||0.00|
|Copper Mountain Mining||1.54||-0.01|
This column is the last of three, for how to prove your personal injury claim. It is the piece de resistance of the trilogy, the Chuck Norris piece – the final say! As mentioned in the first two...
The bank manager just phoned and asked for full and immediate repayment of the line of credit because the latest, (and they were late!), financial statements showed continuing losses and falling sales...
Recently I recorded a video series for my keynote speaking business. It was called from Faith to Future. In one of the episodes, I talked about the concept of using hard work to get out of a difficul...
- NBC's 'Sound of Music' live telecast was Thursday's favourite thing with 18.5 million viewers
- E-commerce growth slowing in Canada as shoppers look to overseas e-stores
- US consumer spending up 0.3 per cent in October but wages and salaries post weak gain
- Healthy hiring in November would mark fourth straight month of solid job growth
- Bruce Lee's iconic yellow jumpsuit fetches $100,000 at Hong Kong auction
- Spotify to allow users to create playlists on phones and tablets and listen to them for free
- US lurching from 'crisis to crisis,' politics influenced by money: Gary Doer
- Governments offers help to develop seal products in backing Atlantic industry
- Precision Drilling shares plummet as Alberta fund manager sells stake
- Most actively traded companies on the TSX, TSX Venture Exchange markets
- CIBC logs $836M profit in Q4, cautiously optimistic about next year
- Auto insurers urge holiday season refresher as young drivers return home