GDP growth underwhelms, leading to first rate cut by Bank of Canada

The country’s gross domestic product (GDP), which measures the value of goods and services for a specific time frame, rose by 0.4 per cent in the first three months of 2024, according to Statistics Canada.

On an annualized rate, the economy expanded by 1.7 per cent, weaker than the 2.2 per cent consensus expectation and the Bank of Canada’s forecast of 2.8 per cent.

The household-savings rate rose to 6.9 per cent from 6.2 per cent in the fourth quarter in seasonally adjusted terms. This was the highest savings rate since the start of 2022.

Statistics Canada Report on Retail trade, March 2024

Canadian retail sales slowed in March as shoppers spent less at furniture, home furnishings, electronics and appliances retailers, reported by Statistics Canada on May 24th.

CIBC senior economist Katherine Judge said Canadian retail sales ended the first quarter on a soft note.

“The waning of momentum over the quarter reflects consumer caution as mortgages come up for renewal at higher interest rates and is consistent with the Bank of Canada beginning to trim interest rates in June,” Judge wrote in a report.

Retail sales decreased 0.2% to $66.4 billion in March. Sales were down in seven of nine subsectors and were led by decreases at furniture, home furnishings, electronics and appliances retailers.

Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—were down 0.6% in March.

In volume terms, retail sales decreased 0.4% in March.

Retail sales were down 0.2% in the first quarter, while in volume terms, retail sales increased 0.3%.

Core retail sales decline

Core retail sales were down 0.6% in March. This was the first decrease for core retail sales in four months. The decline was broad-based with sales at all but one core retail subsector being down.

Lower sales were reported at furniture, home furnishings, electronics and appliances retailers (-1.6%) and at clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (-1.6%).

Receipts were also down at food and beverage retailers (-0.4%) and sporting goods, hobby, musical instrument, book, and miscellaneous retailers (-1.5%).

Building material and garden equipment and supplies dealers (+1.3%) was the only core retail subsector to report an increase in sales in March.

Sales down in six provinces

Retail sales decreased in six provinces in March. The largest provincial decrease was observed in Ontario (-0.3%), led by lower sales at sporting goods, hobby, musical instrument, book and miscellaneous retailers. In the census metropolitan area (CMA) of Toronto, sales were up 1.5%.

In Saskatchewan, retail sales decreased 3.4%, led by lower sales at motor vehicle and parts dealers.

The largest provincial increase in retail sales in March was observed in Quebec (+0.6%). In the CMA of Montréal, sales were up 0.3%.

Retail e-commerce sales in Canada

On a seasonally adjusted basis, retail e-commerce sales were up 3.0% to $4.0 billion in March, accounting for 6.0% of total retail trade, compared with 5.8% in February.

Advance retail indicator

Statistics Canada is providing an advance estimate of retail sales, which suggests that sales increased 0.7% in April. Owing to its early nature, this figure will be revised. This unofficial estimate was calculated based on responses received from 51.0% of companies surveyed. The average final response rate for the survey over the previous 12 months was 90.5%.

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