Canadian retail sales bounced back in November, boosted by gains in the auto sector.
Statistics Canada said Friday retail sales rose 0.9% for the month, largely offsetting a revised 1.1% decline in October. The initial report for October had been a drop of 1.2%.
Economists on average had expected an increase of 0.4% for November, according to financial markets data firm Refinitiv.
TD Bank economist Omar Abdelrahman said the report came after a recent string of disappointing Canadian economic data and a lacklustre year for Canadian retail sales.
“However, one month of data doesn’t make a trend, and it is important to note that the headline print was disproportionately driven by a bounce back in auto sales,” Abdelrahman wrote in a brief report.
Excluding motor vehicle and parts dealers, retail sales were up 0.2% for the month. Economists on average had expected an increase of 0.4%, excluding autos, according to Refinitiv.
“We still expect a tepid performance for the Canadian economy in the fourth quarter,” Abdelrahman wrote.
The Bank of Canada kept its key interest rate on hold earlier this week, but left the door open to future rate cuts amid concerns about economic growth this year.
The central bank estimated the economy slowed to an annual growth rate of 0.3% in the fourth quarter, but predicted a rebound to about 1.3% annual rate in the first quarter of 2020.
Governor Stephen Poloz said the central bank will be paying particular attention to developments in consumer spending, the housing market and business investment.
Statistics Canada said Friday that retail sales were up in six of 11 subsectors tracked by Statistics Canada, representing 70% of retail trade.
The motor vehicle and parts dealers subsector gained 3.0%, led primarily by sales at new car dealers.
Food and beverage stores saw sales rise 0.9%, while building material and garden equipment and supplies dealers reported an increase of 2.1%.
However, furniture and home furnishing stores saw a drop of 0.8%, while clothing and clothing accessories stores fell 1.7%. General merchandise stores lost 0.8%.
Overall retail sales in volume terms increased 0.7% in November.