“Auto sales contributed to the August advance, although that was offset by a decline in the other often volatile segment of gasoline stations.”
However, the momentum appears short-lived. StatCan’s advance estimate for September points to a 0.7% drop in retail sales, which could look even weaker in volume terms as goods prices ticked higher.
“Despite a decent August report, the disappointing September flash highlights the underlying weakness in Canadian retail spending,” said Shelly Kaushik, senior economist at Bank of Montreal.
“Net risks remain to the downside given ongoing trade uncertainty, keeping the Bank of Canada on its dovish path. We continue to believe that the Bank isn’t done easing just yet.”
Grantham also noted that retail sales volumes have barely changed since December, reflecting weak consumer confidence due to United States tariff uncertainty and a softer job market, “and justifying a further interest rate cut from the Bank of Canada next week.”