-- Canadian retail sales rang in "solidly" but softer than expected in February, growing 0.7% month over month against a forecast of 0.9%, said Rosenberg Research after Friday's data.
The "crucial" excluding auto sector also grew less than expected at 0.5% month over month versus 0.8% forecast, noted Rosenberg.
Despite the below-forecasted print, these are still solid numbers, with Canadian retail sales showing clear strength overall, stated Rosenberg. The problem is that this is "stale" data, as it precedes the Iran conflict and the subsequent shock to gasoline prices.
It's reasonable to expect much lower growth over the next few months, it pointed out.
That said, the flash estimate for March came in at a "solid" 0.6% month-over-month growth, meaning that the first quarter as a whole is on pace for an increase of 8.5% on an annualized basis. That would be the fastest pace since Q4 2024 and is a strong build-in for the retail component ahead of Canada's monthly gross domestic product release on Thursday, added Rosenberg.
Rosenberg is slightly skeptical that the March number will be quite that strong, given the gasoline price shock, but Q1 retail sales overall were clearly "solid."
If, as Rosenberg expects, the Canadian economy is headed for an energy-shock-related speedbump in the spring, there's nothing that would suggest the Bank of Canada needs to hike at all. Pre-war inflation trendlines were all fine, and the most rate-sensitive sectors of the economy are "far from healthy."