Canadian retail sales rose by less than a third of what economists forecast in January as the biggest jump in new-car sales in three years was blunted by declines at home-improvement and electronics stores.
Sales increased 0.5 percent to C$38.9 billion ($39.1 billion), following a revised December figure showing little change, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News forecast a 1.8 percent increase, based on the median of 24 projections.
“While the retail report was below consensus expectations, that doesn’t negate the fact that Canadian consumers got off to a decent start in 2012,” said Krishen Rangasamy, senior economist at National Bank Financial in Montreal.
Bank of Canada Governor Mark Carney is relying on households to contribute over half of the country’s projected 2 percent economic growth this year. The Conference Board of Canada also reported today that its consumer confidence index rose to 79.5 in March from 75.2 in the prior month, the third straight increase.
Canada’s dollar weakened 0.7 percent to 99.89 cents per U.S. dollar at 9:15 a.m. in Toronto. One Canadian dollar buys $1.0011.
The retail sales gain was led by a 4.6 percent jump at new car dealerships where people sought “lower-cost passenger cars,” Statistics Canada said.
Ex-auto Sales Fall
Purchases excluding the motor vehicle and parts category fell 0.5 percent. Economists had forecast a 0.5 percent increase.
Sales rose in five of 11 categories marking 52 percent of total sales.
Building material and garden supply sales fell the most in dollar terms in January, dropping 5.2 percent to C$2.24 billion. Electronics and appliance store receipts decreased 3.4 percent, the third straight decline, and gasoline station sales declined 0.1 percent.
General merchandise stores climbed 1.7 percent in January, led by department stores, Statistics Canada said. Clothing and accessory sales rose 0.6 percent.
The volume of sales rose 0.3 percent. That measure excludes the effects of price changes and more closely reflects the industry’s contribution to economic growth.
December retail sales were revised to show little change after a previously reported 0.2 percent decline.
In a separate report, the agency said the number of Canadians receiving jobless benefits increased 2.3 percent to 561,060 in January, the highest level since August. From a year earlier, the number of recipients fell 12.1 percent, or by 77,450.