Canada June retail sales - Strong end to Q2, but July seen weaker
June Canadian retail sales with a 0.6% increase are slightly stronger than the 0.4% preliminary estimate made with May’s data and in real terms increased by an impressive 1.5%. This is supportive for Q2 GDP though the Q2 retail sales gain of 0.4% (not annualized) is moderate in real terms, if up 2.2% in nominal terms.
The preliminary estimate for July however suggests a weak start to Q3, declining by 0.8%. The minutes from the last bank of Canada meeting showed differing opinions on whether an expected pick up in Q2 GDP would be sustainable.
June retail sales increased by 0.5% ex autos but by 1.2% ex autos ad gasoline. After falling significantly in June, gasoline prices started to edge higher again in July making the negative preliminary sales estimate disappointing, suggesting a soft July in real terms.
Gasoline sales fell by 4.1% in June while food was also negative at -0.4%. Elsewhere the breakdown was strong, particularly so in general merchandise, up by 2.7%, and clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers up by 3.1%.
