Kyle Dahms, analysts at NBF Economics and Strategy explained that while Canadian retail sales wilted in June, a moderation was always in the cards after the prior month’s sales surge.
Key Quotes:
“Weak gasoline station receipts partly reflected lower pump prices, while sales of automobiles/parts recoiled from the largest increase in 7 months. Excluding both categories, retail spending rose a solid 0.3% in June after a 1.1% jump in the previous month. That said, discretionary sales, which excludes gasoline, groceries and health products, posted a 0.3% decline.
The soft retail numbers coupled with earlier-reported weakness in wholesaling offset gains reported by factories in the month, suggesting GDP may have been no better than flat in June. But a soft June won’t ruin the quarterly picture with gains of over 3.5% annualized for retail volumes pointing to a solid contribution from consumption in Q2.”
“With such rebounding consumption, don’t be surprised to see Canadian GDP growth near 3% annualized in Q2.”
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