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Special Report

Canada Retail Sales Research Brief

January 2023

Economy Showing Resilience as Inflation Chips Away at
Purchasing Power and Household Spending

Retail sales return as estimates suggest strong end to the year. It appears as though the Canadian economy carried more momentum into 2023 than many anticipated. While retail sales declined 0.1 per cent month-over-month in November, preliminary estimates for December suggest that retail sales increased by 0.5 per cent. After accounting for inflation, this translates into an estimated 1.9 per cent month-over-month increase in total quantity traded. Nonetheless, with consumer confidence continuing to weaken, consumption is anticipated to slow over the coming months. While a recession remains a possible outcome, Canada’s largest banks are now contemplating the idea of a potential soft landing, as many economists underestimated the resilience of the Canadian economy. 

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