Canada Retail Sales Research Brief

Household spending surprises to the upside. Canada retail sales edged up 0.9 per cent monthly in July, which was above the flash estimate of 0.6 per cent and marked the highest gain this year. A 2.2 per cent rise in motor vehicle and parts sales drove this uptick, yet this was to be expected after a cyberattack pushed sales down in June. Nevertheless, the strength in retail sales was broad-based. Core retail sales – which exclude motor vehicle and fuel vendors – also grew by 0.6 per cent, largely due to an uptick in grocery store sales and general merchandise retailers. With a more positive outlook for retail sales beginning to materialize amid falling borrowing costs and elevated population growth, per capita consumption could pick up over the second half of 2024 after experiencing a 2.2 per cent annualized contraction in the second quarter.