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Global Economic Calendar

Canada’s Retail Sales Rose 1.4% In January

Canada’s retail sales gained 1.4% to reach $66.4 billion in January of this year as consumer spending remained strong despite inflation.

The latest result beat the expectations of economists who had forecast an increase in retail sales of 0.7% in January.

Statistics Canada said the monthly increase was largely driven by increased spending on motor vehicles and parts, as well as at gas stations.

However, despite the strong increase observed in January, Statistics Canada said its initial estimate for February shows a 0.6% decline in retail sales during that month.

While the February retail sales figure will be revised, it suggests consumer spending might now be succumbing to higher interest rates that are used to lower inflation.

For January, sales at motor vehicle and parts dealers rose 3%, led by higher sales at new car dealerships. Meanwhile, sales at gasoline stations and fuel vendors increased 2.9% as gasoline prices increased.

Core retail sales, which exclude gasoline and motor vehicle sales, grew 0.5% in January with food and beverage retailers leading the increase.

Sales at liquor retailers rose 2.3% in January, while convenience store and vending machine sales recorded a 6% increase.

Also contributing to the January increase in core retail sales were higher sales at clothing retailers, up 1.8% from a year ago.

In volume terms, Canada’s retail sales rose 1.5% in January.