A solid quarter for Canadian retail sales ended on a softer note in March, with higher gasoline prices already potentially limiting spending in other areas, said CIBC after Friday's data.
While nominal sales posted a solid 0.9% month-over-month advance, which was a little above the 0.6% consensus forecast, that was flattered by the surge in pump prices seen during the month, noted the bank.
Core retail sales -- excluding autos and gasoline -- actually edged down by 0.1% month over month, while overall sales volumes fell by 0.7% month over month.
Still, even with the March dip, retail sales volumes rose by a respectable 1.2% unannualised in Q1, stated CIBC.
Meanwhile, the advance estimate for April pointed to a 0.6% month-over-month increase in overall sales volumes, although as in March, that figure will be flattered by another rise in gasoline prices and, as such, in volume terms will look softer.
Overall, it appears that higher gasoline prices may already be limiting sales in other areas, which will see inflation-adjusted consumer spending growth decelerate again in Q2 following a "solid" Q1, added the bank.