Canada Retail Sales Research Brief

Consumption outlook beginning to improve. Retail sales in Canada jumped 0.4 per cent monthly in September, which – after accounting for inflation – translated into a 0.8 per cent gain. For the third quarter as a whole, inflation-adjusted sales grew by around 5.0 per cent annualized. September’s sales were broad-based, as core retail sales edged up 1.4 per cent, while advanced estimates suggest overall retail spending increased another 0.7 per cent in October. Canadian retail sales have now increased for four consecutive months – the longest growth streak since early 2022 – signaling that past interest rate cuts are starting to boost consumer spending. This comes after restrictive borrowing costs largely curbed consumption over the first half of the year. With interest rates expected to continue trending down over the course of 2025, consumer spending is poised to keep gaining momentum.