Canada November Retail Sales weak at -0.2% but December seen rising by 0.8%
Canada’s 0.2% decline in November retail sales is weaker than expected and the unchanged signal given with October’s data, while October’s gain has been revised down to 0.5% from 0.7$%. However signals for December are positive, with a preliminary estimate for a rise of 0.8%.
Canadian consumers have been subdued since a weather-supported January, contrasting continued resilience in the US, though the preliminary estimate suggests that Canada, like the US, saw a healthy December. Given that October saw a 1.0% rise in real terms, this suggest some improvement in Q4.
November Canadian retail sales fell by 0.2% in real terms and by 0.5% ex autos. Sales excluding autos and gasoline fell by 0.6% so the monthly report is clearly a weak one. Slippage was led by general merchandise at -1.8%. Clothing however saw a strong month at +1.5%.
The data is unlikely to alter the likelihood of the BoC keeping rates unchanged next week. The economy looks subdued but does not appear to be falling into recession while inflation has remained stubbornly high.
