Canada Retail Sales Research Brief

Momentum could be slowing. Household consumption surged 3.6 per cent annualized in the third quarter, as lower interest rates began to feed through into the broader economy. This momentum could be fading, however, as underlying indicators remain soft, evinced by a fast-rising unemployment rate and slowing population growth. In October, while retail sales did increase 0.6 per cent monthly, with core retail sales also up 0.2 per cent, volumes were unchanged when controlling for inflation. Additionally, preliminary estimates suggest November was another month of stagnation, which could signal the start of a larger trend. Some optimism persists regardless, as falling interest rates and strong real disposable income growth could act as a tailwind for household consumption and retail property performance over the course of next year.