- Canadian retail sales edged up 0.1% (m/m) in April, following a 1.3% increase in March (previously reported as 1.1%). The release came close to consensus expectations for a 0.2% uptick.
- After stripping out price movements, the picture was still disappointing, with volumes down 0.2%.
- The sectoral composition of the gains was mixed, with 7 of 11 sectors recording a gain. Sales at gasoline stations (+1.2%) drove a large chunk of the overall increase on the back of higher gasoline prices. Sales were also positive at new car dealers (+1.2%), food and beverage stores (+0.4%), and sporting goods, hobby, book, and music stores (+3.2%). Providing some offset were lower sales at used car dealers (-0.8%), clothing and clothing accessories stores (-1.5%) and building material and garden equipment stores (-2.6%).
- Regionally, only 4 out of the 10 provinces saw retail sales increase in April. The increase was driven by Ontario (+0.9%), Alberta (+1.6%), and Manitoba (+1.8%).
Key Implications
- April’s lackluster retail sales picture came in largely as expected. The modest decline in volumes in April is offset by upward revisions to the prior months, leaving our tracking for Q2 GDP largely unchanged. Looking ahead, we expect positive, yet modest consumer spending gains.
- As noted in our recent Quarterly Economic Forecast, the Canadian consumer spending picture stands in contrast with employment growth and a job market that has been firing on all cylinders. Part of this is likely due to past interest rate increases still working their way into the system and indebted households remaining cautious.
