Data released on Thursday showed retail sales dropped in Canada in July but below previous estimates. According to National Bank of Canada analysts after the massive rebound in June (+4.2%) coming off the easing of social distancing measures, retail sales tapered in July.
Key Quotes:
“Following a massive rebound in June coming off the easing of social distancing measures, Canadian retail sales tapered in July. A pullback following a month driven by the unleashing of pent-up demand is typical. Moreover, retail sales did not contract as much as Statistics Canada had initially estimated.”
“Total retail sales are still well above (7.3%) their pre-pandemic peak but 4% away from their all-time high registered in March. Still, all subsectors were at or above their pre-pandemic level.”
“Looking ahead, Statistics Canada early estimate for August is for an increase of 2.1%. While we do expect Canadians to shift some of their spending towards services as availability increases, consumer outlays on goods should remain relatively strong considering the savings amassed by households during the crisis. That said, supply chain issues and shortages will continue to put a strain on certain goods such as autos and electronics and could limit growth for retail sales.”
