Arab Canada News
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Published: September 24, 2022
Retail sales declined by 2.5 percent to $61.3 billion in July, the first drop Canada has seen in seven months, with sales falling in gas stations, clothing stores, and accessories, the Canadian Statistics Agency reported on Friday. The decline was deeper than the 2.0 percent drop the agency had expected in its early estimate for the month, but its initial estimate for August indicates gains of 0.4 percent for the month. CIBC economist Karen Charbonneau said retail sales were more resilient than expected in the past two months given rising inflation, higher interest rates, and a shift to service consumption.
In the same regard, Charbonneau wrote in a report: "This is the kind of data the Bank of Canada will look for as it enters what should be the final phase of the hiking cycle, as we still expect another half-percentage-point increase in October."
The Bank of Canada also raised its key interest rate target by three-quarters of a percentage point to 3.25 percent earlier this month in its struggle to control inflation. The Canadian central bank is scheduled to issue its next interest rate decision on October 26, when it will also release its updated economic forecasts in the monetary policy report. The Canadian Statistics Agency said on Friday that retail sales in July fell in nine of the 11 sub-sectors it tracks, representing 94.5 percent of retail trade. Sales at gas stations dropped by 14.2 percent over the month as gasoline prices fell by 9.2 percent, and volumes at the stations declined by 7.0 percent. Meanwhile, sales in clothing and accessories stores declined by 3.3 percent as clothing store sales fell by 3.3 percent, shoe stores decreased by 6.5 percent, and jewelry, luggage, and leather goods stores lost 0.6 percent. The diverse stores category, which includes pet stores, cannabis shops, office supplies, and stationery, also saw a sales increase of 0.7 percent. Core retail sales — excluding gas stations, car dealers, and parts — declined by 0.9 percent.
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