Canadian retail sales increased less than economists forecast in September as gains at new car dealers were offset by declines at department stores and gasoline stations.
Sales rose 0.1 percent to C$39.1 billion ($39.3 billion), the third straight increase, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News forecast a 0.5 percent increase, based on the median of 22 projections.
New car dealership sales rose 0.9 percent to C$7.17 billion in September, and have increased 4.9 percent over the prior 12 months. Department store sales fell 0.9 percent to C$2.25 billion while gasoline station receipts fell 0.6 percent to C$4.97 billion, according to the report.
Canada’s economic growth rate may remain less than 2 percent through the rest of this year according to a Bloomberg economist survey. Consumers are reacting to slow employment growth and tighter rules on mortgage borrowing that Finance Minister Jim Flaherty imposed in July to ease the risk of a housing bubble.
“The September retail report was very disappointing,” said Krishen Rangasamy, senior economist at National Bank Financial in Montreal, who also said it suggests economic growth may have stalled that month. “We aren’t particularly bullish about consumers,” because of record consumer debt burdens and the job market, he said.
The Canadian dollar weakened 0.1 percent against its U.S. counterpart to 99.76 cents per U.S. dollar at 9:18 a.m. in Toronto. One Canadian dollar buys $1.0025. Bonds were mixed, with the 2-year benchmark yield little changed at 1.11 percent. Ten-year yields rose 1 basis point to 1.77 percent.
Purchases excluding the motor vehicle and parts category were little changed at C$30.3 billion in September according to Statistics Canada, weaker than all 21 forecasts in an economist survey that had a median projection for a 0.5 percent gain.
“We are climbing out, we have growth, but we aren’t even up to 2008 levels, we are just sort of climbing back up to that,” Garth Whyte, president of the Canadian Restaurant and Foodservices Association, said in a Nov. 20 interview. Consumers are “hanging in there,” he said.
The volume of sales was little changed in the month. That measure excludes the effects of price changes and more closely reflects the industry’s contribution to economic growth.
Sales in September were 1.8 percent higher than a year earlier, Statistics Canada said, the least since a 1.7 percent gain in June.
In a separate report, Statistics Canada said the number of Canadians receiving jobless benefits fell by 5,670 in September from August, or by 1.1 percent, to 525,870. From the year-ago month, the total number of beneficiaries fell 4.6 percent.
To contact the reporter on this story: Greg Quinn in Ottawa at email@example.com