In view of Kyle Dahms, analyst at National Bank Financial, for the Canadian economy, the pullback in retail sales in December was not as bad as expected for the month.
Key Quotes
“Sales were helped by buildings materials/garden equipment which rose for the first time in 6 months in addition to a sizeable contribution from motor vehicles/parts. That said, the rise in auto sales were not enough to offset declines in receipts at gasoline stations.”
“Pump prices continued to falter in the month of December marking a fifth consecutive decline. Encouragingly, total retail sales increased when the price effect is removed (+0.2%) in December which means that the retail sector will probably contribute to GDP for the month.”
“But that won’t translate into a positive note on a quarterly basis, as real retail sales were no better than flat in the fourth quarter of 2018 after having grown 1.1% in Q3. In the four quarters leading to Q4, retail sales were up a modest 0.8% mostly due to higher prices as sales were flat in volume terms.”
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