Consumers continue to reign in their spending due to elevated interest rates, leading retail sales across Canada to decline 0.3% in June.
According to Statistics Canada, the drop in retail sales during June was mostly the result of consumers pulling back their discretionary purchases.
Retail sales, which include spending on everything from groceries to motor vehicles, fell 0.3% on a monthly basis in June.
The June result was in line with analysts’ forecasts and an improvement from a 0.8% decline recorded in May.
In all, retails sales throughout Canada totaled $65.73 billion in June, with sales declining in four of nine subsectors.
The biggest sales declines occurred in motor vehicles and automotive parts, as well as sales of personal care items and sporting goods.
However, despite the June pullback, a preliminary forecast from Statistics Canada shows that July's retail sales grew by 0.6% on a monthly basis.
The reversal of retail sales in July comes after the Bank of Canada cut interest rates twice in recent months, lowering its benchmark overnight rate to 4.50%.
Markets are expecting that the Bank of Canada will cut interest rates by another 25-basis points at its next policy meeting in September.
