-- Canadian retail sales continued their strong start to the year in February, although tougher tests are still to come as higher gasoline prices start to squeeze household incomes, said CIBC after Friday's data.
The 0.7% month-over-month increase in headline sales during February was slightly below the consensus forecast estimate of 0.9%, but built on an upwardly revised 1.2% month-over-month gain in the prior month, noted the bank.
Core sales, which exclude autos and gasoline, rise by 0.6% month over month, while overall sales volumes increase by 0.3%. Sales gain by about 1% on the month in each of the autos, food & beverage, general merchandise and clothing sectors.
The advance estimate for March points to a "solid-looking" 0.6% month-over-month increase in overall sales, although the sharp rise in gasoline prices during the month will be flattering that nominal figure, and in real terms, sales are likely broadly flat on the month, stated CIBC.
Overall, it appears that retail sales in Q1 have posted their best quarter for growth since before the United States trade tensions started to negatively impact consumer sentiment, according to the bank.
However, with higher pump prices limiting the ability of some households to make discretionary purchases, CIBC expects consumer spending to slow again in volume terms during Q2.