Retail sales rose 0.8 per cent in August to $34.5 billion, offsetting July's 0.6 per cent decline.

The bulk of the increase came from higher sales at gasoline stations and new car dealers, Statistics Canada said Thursday. Without those sectors, sales were flat.

Overall, August sales were 3.7 per cent lower than a year earlier.

Retail sales increased 0.4 per cent by volume in August, compared with July.

The numbers confirm that consumers are becoming more willing to spend, TD economist Grant Bishop said in a commentary.

"Consumption should build steadily as incomes improve and households gain confidence," he said. With recovery still constrained in the United States, Canada's biggest trading partner, "the rebound in [Canadian] consumption will be crucial to sustaining Canada's economic recovery," Bishop added.

The largest increase came in the automotive sector, which rose 2.4 per cent, with gasoline stations leading the way at 3.9 per cent.

Sales in the building and outdoor home supplies sector were up 0.5 per cent from the previous month. But sales declined 0.4 per cent at general merchandise stores and 0.2 per cent at miscellaneous retailers.

Retail sales rose in eight provinces, with New Brunswick posting the largest increase at 3.2 per cent. Sales declined 0.9 per cent in Newfoundland and Labrador and 0.2 per cent in Alberta.