Statistics Canada says retail sales up 1.4 per cent in January
Canadian retail sales increased in January. This shows consumer strength despite inflation continuing to push prices higher.
According to Statistics Canada, retail sales increased 1.4% to $66.4 billion. The first month of 2023 was fueled by gains at car and parts dealers and gas stations.
The result beat the agency’s initial estimate for January, which suggested a 0.7% rise in January.
“Consumers entered the new year on a stronger footing,” TD Economics economist Ksenia Bushmeneva said in a note to clients.
“The outlook for consumer spending has improved in the first half of this year as the end of 2022 and the start of 2023 were better than expected.”
However, initial estimates for February saw a 0.6% decline for the month, according to Statistics Canada.
The agency warned that early figures would be revised, but that suggests consumers are resilient and inflation may be fading even as interest rates rise.
Indeed, debt servicing costs have risen, and “the impact of higher interest rates on households is yet to come,” Bushmeneva said.
“Therefore, we continue to expect a significant slowdown in consumer spending in the second half of this year as this headwind intensifies and the labor market slows,” she said.
Auto and parts dealer sales increased 3.0% in January, led by a 3.0% increase in new car dealer sales. Meanwhile, sales at petrol stations and fuel vendors increased by 2.9% as sales volumes fell, while petrol prices rose.
Core retail sales, excluding gas stations, fuel vendors, auto and parts dealers, increased 0.5% for the month, led by food and beverage retailers.
Beer, wine and liquor retail sales increased 2.3%, convenience retailers and vending machine operators sales increased 6%, and specialty food retail sales increased 3.3%.
Core retail sales growth in January included a 1.8% year-on-year increase in retail sales of clothing, clothing accessories, shoes, jewelry, luggage and leather goods, according to Statistics Canada. also contributes.
The increase was driven by a 2.2% increase in clothing and apparel retail sales, the largest increase since February 2022.
Sales at sporting goods, hobby, musical instruments, books and other retailers fell 1.2%, the biggest drop in major retail sales this month. The agency said subsector sales declined in five of his seven months through January.
On a volume basis, retail sales increased 1.5% in January.
This report by The Canadian Press was first published on March 24, 2023.