Retail sales inched up in September, but only because of higher gas prices
Sales report is a sobering sign that Canadian economy is cooling a little, economist says
Retail sales inched up 0.1 per cent to $49.1 billion in September largely because of higher prices at gas stations.
Statistics Canada reported Thursday that retail sales were up in five of 11 sectors of the economy that the agency tracks.
But gas stations were completely responsible for the gain. If sales at gas stations are stripped out, sales fell 0.2 per cent.
In volume terms, sales for the month were down 0.6 per cent.
September saw sharply higher Canadian gas prices because Hurricane Harvey at the end of August knocked U.S. refining capacity offline.
"The only reason why the dollar value of sales stayed positive was because of higher prices," Scotiabank economist Derek Holt said.
Sales were down in half of the provinces, and Scotiabank noted that contractions in two of the last three months in both Alberta and Saskatchewan suggest a further cooling of the pent-up spending demand that was unleashed in the oil patch in the first quarter following two years of recession.
Bank of Montreal economist Benjamin Reitzes said the numbers come as a sobering sign that the economy is cooling down a little, after the Bank of Canada hiked its benchmark rate twice this year.
"Canadian consumer spending appears to have cooled after a very strong first half of 2017," Reitzes noted.