Canada Retail Sales Look to Build on August's Rebound — Update

By Robb M. Stewart

OTTAWA--Canadian household spending looks to have been on the rise as the last quarter ended, with retail sales last month building on a rebound in August.

The value of retail trade in the country increased 1.2% in August from the previous month to a seasonally adjusted 74.57 billion Canadian dollars, the equivalent of about US$53.23 billion, Statistics Canada said Friday. That marked a recovery after sales fell 0.8% a month prior, the first drop of the year.

Momentum looks to have continued through September, with the data agency's early estimate indicating sales for the month rose 0.7%.

The result suggests consumer consumption continues to support economic growth in Canada despite worries the spike in energy prices and renewed trade tensions between Ottawa and Washington may dampen sentiment.

Statistics Canada also estimated manufacturing sales inched higher last month, with the value of shipments up 0.1% from a month earlier. This marks a seventh advance in the last eight months but at a much slower pace than the 1.5% growth notched in August.

The sales survey for August showed broad growth among retailers, driven by activity at new car dealers and with higher gasoline prices lifting spending at the pumps.

The data agency offered no detail with its forecast for September, which was based on the responses of fewer than 60% of retailers surveyed and will be revised.

Cardholder spending in September tracked by Royal Bank of Canada, the country's largest lender, showed that customers were still shopping but the pace of growth is softening. Discretionary services remained the strongest category, and spending on gasoline was up sharply alongside a rise in fuel prices, but outlays on discretionary goods inched down.

The bank estimates core sales, stripping out gasoline and autos, rose 0.4% on a three-month basis, slightly cooler than August's 0.6% growth.

Statistics Canada's August data show trade were up in all nine industry segments it tracks. In volume terms, retail sales were also up 1.2% for the month and 1.8% above a year earlier.

Sales at motor vehicle and parts dealers were up 1.2%, led by a rebound in new cars that countered a decline for used car dealers.

Sales at gas stations and fuel vendors increased 1.7% in August, the first rise in three months, though the volume of sales dropped by 0.5%.

Core retail sales, excludes autos and fuel, were up 1.1% between July and August after a fall of 0.7% a month prior.

Sales of food and drink were up 1.1%, the first rise in three months, and trade at general merchandise retailers also recovered from weakness the month before. Trade at health and personal care stores increased a 10th consecutive month.

Statistics Canada previously estimated industry-level gross domestic product rose 0.2% in August from a month earlier, thanks to a recovery in mining and retail trade that was partially offset by further declines in oil and gas extraction.

The economy was essentially unchanged in July, snapping three straight months of expansion that included upwardly revised growth of 0.4% in June.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

October 23, 2026 09:11 ET (13:11 GMT)