(Ottawa) Canadian retail sales fell for the second month in a row in January, as many non-essential retailers were forced to restrict personal shopping due to the epidemic, but initial indications are for a rebound in February, with restrictions eased.
Retail sales fell 1.1% to 52.5 billion in the first month of the year, according to Statistics Canada, but a preliminary estimate from the agency showed a 4.0% increase for February.
“The recovery in retail sales in February adds to evidence that GDP growth continued into the second month of the year,” wrote CIBC economist Royce Mendes in a report indicating that his bank’s first-quarter forecasts would have been very cautious.
However, the risks to the economy from the third wave of the virus are greater now than when these forecasts were made. As a result, the second quarter could start on a weaker than expected basis. ”
Recent economic data indicates that Canadian economic performance was stronger than expected at the beginning of the year.
Statistics Canada announced last week that it had created 259,000 jobs across the country in February, outpacing the net gain of 75,000 expected jobs, and the Bank of Canada said earlier in March that it now expects the economy to grow in the first quarter. The central bank had previously expected a contraction for this period.
Ksenia Pushmeneva, an economist at TD Bank, said credit and debit card data showed spending rebounded strongly when the provinces began phasing out restrictions last month.
M. “In general, the Canadian economy has been relatively resilient in the face of the second wave of the epidemic, and the points of recent economic re-opening up to optimism for the coming days.”I am Pushmeneva.
However, the slowdown in vaccination so far and the recent increase in cases continues to represent uncertainty for consumers and businesses about what the next few months may hold. ”
The drop in retail sales in January was supported by a 1.4% drop in core retail sales – which excludes gas stations and auto and parts dealers.
Sales at clothing and accessories stores decreased 17.8%, and sales in furniture and home furnishing stores decreased 15.1%. Sales of sporting goods, hobbies, music and libraries fell 16.8%.
Meanwhile, higher gasoline prices helped boost sales at petrol stations, which rose 0.9% in January.
Statistics Canada said, by volume, retail sales fell 1.6% in January.