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Data released today showed that Canadian retail sales dropped 0.3% in January, against expectations of an increase of 0.4%.  According to National Bank of Canada analyst, Jocelyn Paquet, the decline in sales appears generalized.  

Key Quotes:

“Once again in January, retail sales came in below consensus expectations, posting their fifth decline in the last six months. Although some of the disappointment could be explained by weaker-than-anticipated outlays at motor vehicle and parts dealers, the current malaise appears more generalized. Excluding automobiles, sales could do no better than a 0.1% increase and that after five consecutive monthly drops.”

“What is the cause of this slowdown in retail sales? Surely, the job market isn’t to blame; the country has added no less than 290K jobs in the past 6 months, the best performance since 2002. The housing sector, on the other hand, is in the midst of an extended slowdown. Seasonally adjusted homes sales are down roughly 23% since late 2017 and prices have come down in some regions of the country. This may have impacted consumer confidence via negative wealth effect. The slump in oil prices, which has affected the economy of several Canadian provinces in late 2018 and early 2019, is another factor to consider.”