Highlights:
- November retail sales increased 0.2% in nominal terms, and 0.3% controlling for the impact of prices.
- Volume sales were boosted by a sharp 12.6% rise in sales at electronic stores.
- E-commerce sales (not all of which are included in the retail sales totals) were up 25.5% over the past year ending in November. That was up from an 18.5% rate in October but still below the 40%+ year-over-year average increase over the first 8 months of 2017.
Our Take:
Retail sales inched up 0.2% in November to build on a 1.6% jump in October. Part of the increase was due to sharp jump in gasoline prices that was responsible for most of a 6% jump in sales at the pump. Sales nonetheless rose a somewhat stronger 0.3% excluding the impact of prices — boosted by a 13% surge in sales at electronic & appliance stores. Statistics Canada noted that the increase in electronics sales in particular looked to have been boosted by new product launches and promotions like ‘Black Friday’ sales. That means some of the sales increase in November may prove to have been at the expense of sales in December and/or January. Nonetheless, with labour markets continuing to improve at a rapid pace through the end of the year, there are also good reasons to think current underlying trends in retail demand — and indeed, the rest of the economy — remain solid. The retail numbers follow earlier reported sales gains in the manufacturing and wholesale sectors in November. Combined with the potential for a bounce-back from what was likely transitory weakness in oil production in October and still-solid labour market data, that suggests GDP potentially posted a 0.3% or 0.4% increase in November following the surprisingly soft flat reading the prior month. That would remain supportive of the Bank of Canada’s, and our own, view that the Canadian economic backdrop continues to improve, if not at the outsized pace seen from mid-2016 to mid-2017.
