International
Canada Retail Sales Rise 1.0% in May; Economists See Momentum Building Into June
May's retail sales, which advanced 1.0% in line with Statistics Canada's flash estimate, were driven primarily by higher receipts at gas stations. The preliminary reading for June points to a 0.4% increase.Beyond the gas price increase, retail sales were solid in May, and a decent flash for June adds to the encouraging news, said Shelly Kaushik, senior economist at BMO. The economy seemed to be building momentum in Q2, although additional challenges - more tariffs, extreme weather, and the renewed energy price shock-await in the second half of the year, said Kaushik.All nine sectors were higher, led by sporting goods and hobby stores (+1.8%), general merchandise (+1.0%) and building materials (+0.9%). Nine of the 10 provinces posted higher sales, led by Saskatchewan (+2.9%). Nova Scotia was the lone outlier with a 0.8% drop driven by autos.Looking ahead, expanded household benefits will support incomes and spending in the second half of the year, but the recent rebound in gasoline prices will limit the extent of any pick up in retail sales volumes, noted CIBC's senior economist Andrew Grantham.May delivered a solid month for retail sales, with core spending and real activity rebounding after two consecutive monthly declines, noted TD Economics in its note on Thursday.Maria Solovieva, economist at TD Economics said FIFA-related spending would also help support June's figures and described higher oil prices as "an incremental tax on household purchasing power.""Oil prices have resumed their climb this morning and, while they remain below the highs reached in April, they still represent an incremental tax on household purchasing power, particularly for lower-income consumers," Solovieva added.
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