(OTTAWA) Canadian retail sales rose in January, a sign of strength in consumer activity, even as inflation continued to push prices higher.
Retail sales climbed 1.4% in January to $66.4 billion, boosted by gains at motor vehicle and parts dealers and gasoline stations, Statistics Canada said Friday.
This result was higher than the federal agency’s initial estimate for the first month of the year. She had suggested last month that sales may have risen 0.7% in January.
“Consumers started the new year on a stronger footing,” Ksenia Bushmeneva, an economist at TD Economics, observed in a note to clients.
“A better-than-expected end to 2022 and start to 2023 has led to an improvement in our consumer spending outlook for the first half of this year. »
Statistics Canada now calculates, on a preliminary basis, that sales fell by 0.6% in February, while recalling that these data will be revised before their official publication, next month.
A decline would suggest a depletion of consumer resilience to rising interest rates and inflation.
Indeed, debt servicing costs have risen and “much of the impact of higher interest rates on household finances is yet to come”, Ms.me Bushmeneva.
“As such, we continue to expect consumer spending to slow significantly in the second half of this year as this headwind intensifies and the labor market slows,” she said. .
In January, motor vehicle and parts dealers saw their sales rise 3.0% on stronger sales of new vehicles, which also rose 3.0%. Meanwhile, sales at service stations and fuel merchants rose 2.9%. Sales volumes fell, but fuel prices rose.
Core retail sales, which exclude gas stations and car dealerships, rose 0.5% in January, largely on higher sales at grocery retailers.
Sales at beer, wine and liquor retailers increased 2.3%, convenience stores and vending machine operators increased 6.0% and specialty food retailers increased 3.0%. .3%.
Sales growth at retailers of clothing, clothing accessories, footwear, jewellery, luggage and leather goods also contributed to the increase in core retail sales in January, with growth of 1.8% compared to compared to the same month last year, according to Statistics Canada.
Sales growth at these retailers was mainly due to a 2.2% increase in sales at clothing and clothing accessories retailers — their strongest since February 2022.
Sales at retailers of sporting and hobby goods and musical instruments and miscellaneous retail fell 1.2%, the largest decline in core retail sales for the month of January. Sales fell in this subsector in five of the seven months to January, the agency said.
Expressed in volumes, retail sales in January rose 1.5%, added Statistics Canada.