Retail Sales Drop In Canada For First Time In Three Months

With a less-than-anticipated decline, retail sales in Canada dropped in September for the first time in three months. Statistics Canada noted that retailers sold 0.1 percent fewer goods in the month as shoppers spent less on gasoline and motor vehicles, which beat a median forecast in a Bloomberg survey of a 0.3 percent drop, Bloomberg reported.

With the exclusion of motor vehicles, retail sales rose 0.2 percent. The September sales figures came out ahead of economist expectations, furthering the Bank of Canada‘s view that consumer spending remains strong even with worldwide trade tensions.

September sales dipped 0.1 percent in volume terms, which counteract the effects of price changes. Q3 retail sales increased 0.5 percent in volume terms. Lower new car sales were the biggest contributor to the monthly drop, and used car dealer sales were 3.6 percent higher on the month.

According to Bloomberg, the Q3 report comes ahead of the release of quarterly gross domestic product (GDP) next week. Economists have predicted an output deceleration from 3.7 percent in the prior quarter to 1.3 percent.

Retail sales in the U.S. fell 0.3 percent in September, the first such decline in seven months, per figures released by the U.S. Commerce Department. The news comes amid ongoing fears of a recession and worries about trade wars. The Commerce Department also noted that automobile sales dropped 0.9 percent, the sharpest decline in eight months.

Online retail suffered a 0.3 percent decline, while sales at furniture and home furnishings stores declined by 0.6 percent. Meanwhile, retail sales for August were revised to a 0.6 percent gain from the previous 0.4 percent gain.

Ian Lyngen, head of rates research at BMO Capital Markets, said per reports, “While this is by no means conclusive evidence that the consumer is wavering (after all, the upward revisions reduce the impact of September’s declines), it nonetheless reinforces our ongoing concern that a spending retrenchment will ultimately trigger a more durable slowdown.”