The Canadian Statistics Agency said that retail sales rose by 0.1 percent to $65.9 billion in June, supported by sales at new car dealers.

The agency also added that core retail sales - which exclude gasoline stations, fuel sellers, car dealerships, and parts dealers - fell by 0.9 percent in June.

Retail sales increased in three of the nine sub-sectors, led by a 2.5 percent rise at car and parts dealers, with new car sales rising by 2.9 percent. Sales at gasoline stations and fuel sellers rose by 0.3 percent, supported by rising prices at gas stations in June.

For his part, Tiago Figueiredo, an economist at Desjardins, said in a client note: "Canadian consumer spending continued to deteriorate in June."

He added that the numbers indicate weaker economic growth ahead, consistent with the Bank of Canada's forecasts.

Desjardins estimates that GDP rose by 1.4 percent in the second quarter, which is slightly below the central bank's forecast of 1.5 percent.

Sales at general merchandise stores fell by 1.4 percent, while food and beverage retail saw a decline of 0.9 percent.

In terms of volume, retail sales decreased by 0.2 percent in June.

With the underlying weakness in the retail sales report, Maria Solovina, an economist at TD Economics, said that consumer spending could regain its footing with government grocery discounts that are attributed to about 11 million Canadians in July.

The Canadian Statistics Agency also said its early estimates for retail sales in July indicated an increase of 0.4 percent for that month, although it warned that the number would be revised.

Katherine Judge of CIBC Economics stated that she expects a final increase of a quarter percentage point in September from the Bank of Canada, but she says this could change if the preliminary GDP estimates for July appear weak enough.