The Conference Board of Canada’s Chief Economist Craig Alexander offers the following perspectives on Statistics Canada's Retail Trade announcement.
“Canadians kept their wallets closed in December, but this followed solid growth in the prior months and the weakness in retail spending is unlikely to persist. As economic growth improves, job creation continues, and incomes rise at a modest pace, we should see moderate gains in retail spending this year,”
—Craig Alexander, Senior Vice-President and Chief Economist, The Conference Board of Canada.
- Canadian cash registers fell silent in December, with retail sales posting a 0.5 per cent decline in the last month of 2016 versus consensus forecasts for a flat reading.
- The details were equally negative. Removing price effects, the volume of retail sales fell 1.0 per cent, which will weigh down economic growth in the month. 9-of-11 retail sectors recorded a decline. 8-of-10 provinces also recorded lower sales. Most of the sectors involved in the holiday shopping season experienced a pullback in customer spending, although on-line purchases in December recorded a gain.
- Excluding the volatile vehicle and parts sector, retail sales were down 0.3 per cent. Spending on gasoline rose 6.6 per cent, with the result that retail spending excluding autos and gasoline was down a significant 1.4 per cent.
- The negative news for December is tempered by the fact that retail sales followed three months of growth, and monthly data tends to be quite volatile. For 2016 as a whole, retail sales rose 3.7 per cent from their levels in 2015, which constitutes a modest increase.