Canadian retail sales drop in November, fail to deliver holiday shopping boost
Statistics Canada said retail sales fell 0.9 per cent to $50.4 billion in November, a drop larger than the 0.6 per cent forecast by economists polled by Thomson Reuters Eikon.
The drop came as sales at gasoline stations and motor vehicle and parts dealers declined. Excluding these two subsectors, retail sales inched up 0.2 per cent. Overall, sales were down in six of 11 subsectors, representing 75 per cent of retail trade.
Retail sales in volume terms fell 0.4 per cent.
While economists had expected that cheaper gas and weaker auto sales would drag down the headline reading, they had predicted growth in other areas.
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An advance of a mere 0.2 per cent increase is “somewhat surprising given that in addition to healthy employment readings and falling gas prices, there has been a trend in recent years toward more holiday shopping occurring in November and less in December,” economist Royce Mendes at CIBC Capital Markets wrote in a note shortly after the release.
“Consumers were apparently in no mood to spend the gains they’ve made from increasing job totals nor the savings from lower gasoline prices,” Mendes noted.
A bright spot in an overall humdrum release came from online sales, which bucked that trend, staging a 20 per cent year-over-year increase. E-commerce now accounts for 4.2 per cent of total retail trade in Canada, BMO chief economist Douglas Porter noted.
Still, the November retail sales data adds to a run of disappointing data releases that suggest the economy “likely dipped in the month,” Porter said.
That means growth of the last three months of the year could come in below even the Bank of Canada’s modest 1.3 per cent forecast, he added.
— With files from the Canadian Press