(Ottawa) Retail sales rose in February in Canada for the fourth time in five months, this time by 0.1% to reach 59.9 billion.
Posted at 12:57 p.m.
Statistics Canada points out that the 15.1% increase in sales at clothing and clothing accessories stores and 6.2% at gas stations were offset by the 5.1% decline in sales at vehicle dealers and auto parts.
However, in volume, retail sales fell 0.4% in February.
TD Bank economist Ksenia Bushmeneva pointed out that consumer spending should remain strong in the near term, supported by the easing of public health restrictions, strong demand and a healthy labor market.
“But rising prices and interest rates will start to weigh on household budgets in the second half of the year, prompting consumers to tighten their purse strings,” Ms.me Bushmeneva in a report.
“Retail sales could also weaken as consumption continues to shift away from goods towards services, such as travel and hospitality,” she added.
Sales increased in six of the eleven subsectors, which in February accounted for 47.2% of retail trade.
Statistics Canada noted that retail sales rose in four provinces in February, with the biggest increases seen in Manitoba, up 5.1%, and Nova Scotia, up 4.3%. They rose 0.3% in Ontario, but fell 0.4% in Quebec, 0.8% in New Brunswick and 2.3% in Prince Edward Island.
Given the rapidly changing economic situation, Statistics Canada is producing forward estimates for retail sales that suggest they rose 1.4% last month in Canada.
High prices
According to Nikita Perevalov, director of economic forecasts at Scotiabank, much of March’s increase was likely due to high prices, with the annual inflation rate for the month at 6.7%.
“High consumer prices point to vulnerability at the heart of the Canadian economy – household budgets may not be able to withstand record increases in food and energy prices for long, forcing higher growth. low spending on discretionary items,” Mr. Perevalov wrote in a note to clients.
The Bank of Canada raised its key interest rate target by half a percentage point to 1% last week and warned that more rate hikes are on the way as it seeks to rein in the inflation.
The consumer price index posted its largest increase in more than 30 years in March, rising 6.7% from a year earlier, one percentage point more than its increase of year to year in February.