Canada Retail Sales Post Surprise Drop--Update
Canadian retail sales unexpectedly fell in August, due in part to the biggest month-over-month drop in purchases of food and beverages in nearly three years.
A solid gain in auto-related transactions and the first gain for gasoline stations in four months weren't enough to stop retail sales from posting their steepest drop since March of last year.
The value of retail sales in August declined 0.3% on a seasonally adjusted basis to 48.93 billion Canadian dollars ($39.21 billion), Statistics Canada said Friday. Market expectations were for a 0.5% gain, according to economists at Royal Bank of Canada. On a year-over-year basis, retail sales rose 6.9%.
Excluding the auto component, August retail receipts fell by a steeper 0.7%.
Sales dropped by a similar 0.7% on a volume, or price-adjusted, basis.
The retail report adds to evidence of a slowdown under way in the Canadian economy, following a stellar 12-month run. Canada's gross domestic product was largely unchanged in July from the previous month, and data for August has been mixed.
According to the August retail report, eight of the 11 sectors tracked posted decreases from the previous month.
The biggest weight on the retail figures was a 2.5% drop in sales at food and beverage stores, to C$9.98 billion. Sales were also down at outlets associated with building materials and garden supplies. Those sales fell 1.9% to C$3.03 billion.
In contrast, sales at new-car dealerships advanced 0.7% to C$10.66 billion, and gasoline-station receipts rose 3.1% to C$5.03 billion on higher fuel prices.
Write to Paul Vieira at paul.vieira@wsj.com
OTTAWA -- Canadian retail sales unexpectedly fell in August, due in part to the biggest month-over-month drop in purchases of food and beverages in nearly three years.
A solid gain in auto-related transactions and the first gain for gasoline stations in four months weren't enough to stop retail sales from posting their steepest drop since March of last year.
The value of retail sales in August declined 0.3% on a seasonally adjusted basis to 48.93 billion Canadian dollars ($39.21 billion), Statistics Canada said Friday. Market expectations were for a 0.5% gain, according to economists at Royal Bank of Canada. On a year-over-year basis, retail sales rose 6.9%.
Excluding the auto component, August retail receipts fell by a steeper 0.7%.
Sales dropped by a similar 0.7% on a volume, or price-adjusted, basis.
"While the retail dip doesn't destroy the bigger picture of consumer strength, it reinforces the theme that overall growth is now set to cool after a strong run," said Doug Porter, chief economist at BMO Capital Markets. His firm now expects annualized growth in the third quarter of 2%, after a hefty 4.5% advance in the second quarter.
According to the August retail report, eight of the 11 sectors tracked posted decreases from the previous month.
The biggest weight on the retail figures was a 2.5% drop in sales at food and beverage stores, to C$9.98 billion. Sales were also down at outlets associated with building materials and garden supplies. Those sales fell 1.9% to C$3.03 billion.
In contrast, sales at new-car dealerships advanced 0.7% to C$10.66 billion, and gasoline-station receipts rose 3.1% to C$5.03 billion on higher fuel prices.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
October 20, 2017 09:53 ET (13:53 GMT)