Retail sales top forecasts

Retail sales unexpectedly rose by 0.5 per cent in August from July as consumers shopped for furniture and new cars and spent more to fill up at the gas pump.

Retail sales unexpectedly rose in August as consumers went shopping for furniture and new cars and spent more to fill up at the gas pump, Statistics Canada said Friday.

Economists had expected sales to fall by a tenth of a per cent.

August sales jumped 0.5 per cent to $36.1 billion. Sales at gasoline stations rose 2.1 per cent — the largest increase among any of the major subsectors. New car sales rose 1.0 per cent from the month before.

Excluding the auto sector, sales rose 0.4 per cent.

Food and beverage sales rose 0.8 per cent from July's levels and are now 4.3 per cent higher than a year ago.

Sales at home furnishing stores surged by 7.0 per cent. TD Bank economist Pascal Gauthier said the big rise in home furnishing sales reflected "a temporary bounce back from a massive HST-related contraction in July." Both Ontario and British Columbia adopted the Harmonized Sales Tax on July 1.

"Gains were reported in six of 11 subsectors representing 70 per cent of total retail sales," Statistics Canada said.

Among the subsectors where sales fell, the biggest drop came in sporting goods, hobby, book and music stores, where sales fell by 1.8 per cent.

Sales rose in seven provinces, led by a 3.4 per cent gain in Nova Scotia. The HST in Nova Scotia rose by two percentage points in July.

Retail sales fell marginally in Prince Edward Island (down 0.7 per cent), and in B.C. and Quebec (both down 0.1 per cent).

StatsCan also upwardly revised its reading on July's retail sales to a gain of 0.1 per cent. The agency had initially reported a drop of that magnitude.