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Scotiabank Previews Friday's Retail Sales Data in Canada

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Canada is set to publish its March and preliminary April retail sales at 8:30 a.m. ET on Friday, said Scotiabank.

Canada has been tracking Q1 retail sales volume growth of around 6% quarter-over-quarter seasonally adjusted annual rate (SAAR), which aligns with around 4% quarter-over-quarter growth SAAR growth in goods consumption alongside healthy proxy measures for spending on services, noted the bank.

Statistics Canada has guided that March was tracking a nominal retail sales gain of 0.6% month-over-month seasonally adjusted. Details, including volumes, will be important to further inform the health of the consumer, stated Scotiabank. StatsCan will also release, on Friday, April's retail sales nominal growth estimate without details.

The consumer was looking rather buoyant to start off 2026. Pessimists --who were wrong with their gloom coming into Q1 -- will dismiss that strength as something to fade in the face of a commodity shock, stated Scotiabank.

Regardless, there are implications for Q1 gross domestic product tracking, pointed out Scotiabank. Consumption appears to be strong. Inventories are likely to rebound from the 4% weighted drag on Q4 GDP and because of surging imports that may have occurred in order to front-run expected price increases as in the United States.

Rate-sensitive spending is getting a lift from other things, like government spending, it added. From very little to no growth expected or being previously tracked in Q1 at the start of the year, 2% quarter-over-quarter SAAR now seems plausible, which would be double the estimated potential growth rate, thereby narrowing some slack in the economy just as commodities add inflation risk in addition to prior pre-war movements in producer prices.

There may be upside to this Q1 GDP estimate given, for example, that Scotiabank really has little ability to estimate the inventory side of the equation since Canadian monthly inventories are only available for manufacturing and wholesale, while markets get quarterly retail, resources and agricultural inventories.

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