Canadian retail sales rebound but economy remains vulnerable
Canadian retail sales rebounded sharply in January, as severe weather lessened its grip on a sideways moving economy.
January retail sales rose 1.3 percent to $40.7 billion, following a revised drop of 1.9 percent, Statistics Canada reported today from Ottawa. The gain, which was the fastest since May, offered hope consumer spending would continue to rebound heading into the spring. Retail sales excluding automobiles were up 1 percent, following a revised drop of 1.5 percent.
Revenues increased in seven of the 11 retail sub-sectors, led by a 2.2 percent advance in motor vehicles and parts dealers. The 7 percent advance at building material and garden equipment dealers nearly offset the weather-induced decline in December. Sales at general merchandise stores rose 2.2 percent, while gasoline sales increased for the third consecutive month at a rate of 0.9 percent.
In volume terms, sales were up 1.4 percent, official data showed.
Alberta, the nation’s oil and gas hub, reported the largest increase in dollar terms at 3.5 percent. Retail sales edged down 0.1 percent in Quebec, the nation’s second-most populous province.
The gains helped shore up the loonie, but weren’t enough to offset bearish sentiment toward the Canadian economy. Investors sizing up Canadian prospects are doing so against a backdrop of bearish sentiment from central bank Governor Stephen Poloz, who said earlier this week slow growth may become the new norm for Canada.
The Canadian economy will face headwinds over the next year as the nation of 36 million struggles to get back to full capacity. According to Poloz, that won’t happen until the latter-half of 2015.
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