By Promit Mukherjee
OTTAWA, Sept 24 (Reuters) – Canadian monthly retail sales fell by 0.7% in July, marginally better than an average of analysts’ expectations, primarily led by declines at general merchandise retailers, data showed on Thursday.
Retail sales, which include purchases of cars, furniture, food and gasoline, are considered an early indicator of gross domestic product growth and account for about 40% of consumer spending.
• Retail sales dropped to C$73.70 billion ($52.25 billion) in July from C$74.25 billion in the prior month, Statistics Canada said.
• However, sales are likely to rebound once again in August and increase by 1.3%, the statistics agency said in an advance estimate.
• Sales were down in eight of nine sub-sectors in July. In volume terms, retail sales decreased 1.1%.
• General merchandise retailers, stores that sell a broad mix of unrelated goods from groceries to food and apparel to electronics, posted the biggest decline in sales in July. This category, which contributes up to 15% of total retail sales, slumped by 1.9%.
• Sales at motor vehicles and parts dealers, which account for the biggest share of retail sales, dropped by 0.8%, data showed.
• Purchases at food and beverage retailers, the second-biggest category, dropped 0.1%; however, sales at supermarket and grocery retailers hardly changed.
• The category of building materials was the only sub-sector which posted an increase, with sales increasing 0.8%.
• “We don’t expect the momentum to extend, as lingering trade uncertainty will likely weigh on discretionary spending ahead,” Katherine Judge, senior economist at CIBC Capital Markets, wrote in a note. This means the Bank of Canada will not be raising rates in the near term, she added.
($1=$1.4105 Canadian)
(Reporting by Promit Mukherjee and Dale Smith; Editing by Andrea Ricci )
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