Canada April retail sales resilient but May seen much weaker
Canadian retail sales saw a 0.3% increase in April, slightly less than the preliminary estimate of 0.5% made with March’s data. The preliminary estimate for May is for a 1.1% decline, which suggests US tariffs are starting to weaken the Canadian economy.
March data showed 0.3% decline ex autos, but a 0.1% increase ex autos and gasoline. Autos may have been inflated by fear of future tariffs, while gasoline was depressed by the abolition of a consumer carbon tax.
With retail sales up by 0.5% in real terms April sales can be seen as resilient overall, but the signal for weakness in May is more significant.
April GDP is seen resilient with a preliminary estimate of up 0.1% made with March data, though we expect an unchanged outcome. The preliminary estimate fir May however is likely to be negative.
