Retail sales rose 0.6% to $66.5 billion in September led by increases at motor vehicle and parts dealers, said Statistics Canada. The agency’s early estimates also suggest retail sales increased 0.8% in October, though it cautioned the forecast would be revised.

For September, sales at motor vehicle and parts dealers rose 1.5%, led by a 2.4% gain in sales at new car dealers, while used car dealers saw a 2% drop. Core retail sales — which exclude gasoline stations, fuel vendors and motor vehicle and parts dealers — fell 0.3% in September.

CIBC economist Katherine Judge said that reflected “widespread weakness across many discretionary categories.” While the overall results were “well above” predictions of a flat month for retail sales, Judge noted the 0.6% rise was concentrated in auto sales and gasoline. October’s advance estimate “would likely just represent a temporary reprieve, given the climb in the unemployment rate that’s being seen, along with the impact of mortgage renewals at higher interest rates,” she said in a note to investors.

Sales at food and beverage retailers fell 0.4%, while sales at sporting goods, hobby, musical instrument, book and miscellaneous retailers dropped 1.6%. Building material and garden equipment and supplies dealers saw an increase of 0.5%. In volume terms, overall retail sales increased 0.3% in September.

TD economist Maria Solovieva said there is risk that a seasonal surge in shopping toward the end of 2023 may not be enough to reverse weak momentum from last quarter. “Our estimates using internal card spending point to a continued slowdown in October,” she said in a note. “While Black Friday deals might attract attention, the overarching theme of this year’s holiday shopping is expected to be centred around bargain hunting, reflecting cautious consumer sentiment.”

Source: The Star
Source: Financial Post
Source: Statistics Canada