Canadian retail sales fall flat after surging for four months

(Dec 20): Canadian shoppers ended their spending spree in November after a four-month streak of strong gains.

An advanced estimate suggests receipts for retailers were unchanged last month, following a 0.6% gain in October, Statistics Canada said on Friday. October’s increase slightly missed expectations for a 0.7% jump in a Bloomberg survey of economists.

Retail figures point to fading momentum in consumption as Bank of Canada policymakers are expected to keep cutting borrowing costs early next year, albeit at a slower pace than the second half of this year. The central bank has reduced borrowing costs by 175 basis points since June, with a second straight half-percentage point cut last week.

The statistics agency revised retail sales for the third quarter upward to 1.1%, from 0.9% previously. The spike in spending occurred even as population growth slowed over that period.

In a separate release, advance data showed wholesale sales fell 0.7% in November.

In October, retail sales were up in five of nine subsectors, led by increases at both new and used car dealers. Excluding autos, sales rose 0.1%, missing economist expectations for 0.4% growth.

Receipts at gas stations were down for a sixth straight month in October. Core retail sales, which exclude gas stations and car dealers, edged up 0.2%, a second consecutive increase, led by higher sales at furniture, electronics and appliances retailers as well as health and personal care stores.

In volume terms, retail sales were unchanged in October.

Regionally, sales were up in seven of 10 provinces, with some of the biggest increases seen in Ontario and British Columbia, led by higher car sales.

The statistics agency didn’t provide details on the November estimate, which was based on responses from 50.6% of companies surveyed. The average final response rate for the survey over the previous 12 months was 88.7%.