OTTAWA — Canadian retail sales slowed in March as shoppers spent less at furniture, home furnishings, electronics and appliances retailers, Statistics Canada said Friday.
The agency said retail sales dropped 0.2 per cent to $66.4 billion in March, however its early estimate for April pointed to an increase of 0.7 per cent for that month.
CIBC senior economist Katherine Judge said Canadian retail sales ended the first quarter on a soft note.
"The waning of momentum over the quarter reflects consumer caution as mortgages come up for renewal at higher interest rates, and is consistent with the Bank of Canada beginning to trim interest rates in June," Judge wrote in a report.
"The advance estimate for April sales suggested a 0.7 per cent increase, but that will partly reflect a surge in gasoline prices, with real volumes likely to be up by about half that pace, and essentially only just reversing the March decline."
The Bank of Canada's next interest rate decision is set for June 5. Governor Tiff Macklem has said it is "with the realm of possibilities" that the central bank could cut rates in June, but that the decision will be based on the economic data.
Statistics Canada said retail sales in March fell in seven of nine subsectors.
Sales at furniture, home furnishings, electronics and appliances retailers fell 1.6 per cent, while sales at clothing, clothing accessories, shoes, jewelry, luggage and leather goods stores also dropped 1.6 per cent.
Retail sales at motor vehicle and parts dealers gained one per cent in March, helped by a 1.1 per cent increase at new car dealers.
Core retail sales — which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers — fell 0.6 per cent.
The only core retail subsector to report an increase in sales was building material and garden equipment and supplies dealers which gained 1.3 per cent.
In volume terms, overall retail sales fell 0.4 per cent in March.
This report by The Canadian Press was first published May 24, 2024.
The Canadian Press
