Statistics Canada reports retail sales up 0.7% at $72.1B in February

Retail sales rose 0.7% to $72.1 billion in February as sales at new and used car dealers climbed, Statistics Canada said Friday (April 24).

TD Bank economist Maria Solovieva said consumers delivered another solid month in February, with early indications pointing to continued strength in March. 

Looking ahead, Statistics Canada said its advance estimate of overall retail sales for March pointed to a gain of 0.6%, though it cautioned the figure would be revised.

"That said, inflation jumped in March, suggesting some of the momentum is being driven by higher prices rather than broad-based demand growth," Solovieva wrote in a report. 

"Higher energy prices will dent purchasing power, but we do not expect this to materially weaken domestic demand beyond what's already embedded in our outlook. Together with the drags from weak population growth and trade-related headwinds, the economy is expected to grow at a below-trend pace this year."

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Statistics Canada said retail sales in February rose in seven of the nine subsectors it tracks, boosted by motor vehicle and parts dealers which rose 1%.

Sales at new car dealers gained 0.7%, while used car dealers added 4%.

Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, rose 0.6% in February.

The agency said the gain in core retail sales was led by general merchandise retailers which added 1.2% and food and beverage retailers which rose 0.9%.

It also said clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers gained 1.1% in February.

Sales at building material and garden equipment and supplies dealers fell 0.6%.

In volume terms, overall retail sales increased 0.3% in February.

The Bank of Canada's next interest rate decision is set for April 29.