Canadian retail sales rebound in August after steep drop in July

Receipts for retailers increase 0.4 percent based on an advanced estimate but are still well below the June peak

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Canadian retail sales rose slightly in August, a welcome rebound from the largest decline in more than a year in July.

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Receipts for retailers increased 0.4 percent in August, Statistics Canada said Friday in Ottawa, according to an advance estimate. That follows a 2.5 percent drop in July, which was the first decline in seven months and the largest since April 2021. Lower sales at gasoline stations and clothing stores led the decline in July.

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Analysts are closely monitoring retail spending to gauge how much consumers may be pulling back as inflation and higher interest rates erode purchasing power. Recent economic data suggest the Canadian economy has already begun to slow down from a strong first half of 2022.

The 0.4 percent rebound in August still puts retail sales well below its peak in June. Sales in volume terms, meanwhile, remain sluggish, barely changed from year-ago levels.

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The statistics agency did not provide details of the August number, which is based on responses from 51.1 percent of companies surveyed. The agency said the number would be revised.

Sales were down in nine of 11 subsectors in July, representing 94.5 percent of retail trade. Excluding autos and parts, retail sales decreased by 3.1 percent.

Sales at gasoline stations fell 14.2 percent for the month as gasoline prices fell 9.2 percent and sales at gasoline stations in volume terms decreased 7.0 percent. Sales at clothing and clothing accessories stores dropped 3.3 percent.

Core retail sales — which exclude gasoline stations and motor vehicle and parts dealers — fell 0.9 percent.

In volume terms, retail sales fell 2.0 percent in July.

The median estimate in a Bloomberg survey of economists called for a two percent drop in retail sales for July.

Bloomberg.com

With a file from The Canadian Press

Bloomberg.com

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