Canada Retail Sales Rise 0.5% in February Led by Pharmacies

Canadian retail sales climbed in February as consumers spent more at pharmacies and department stores.

Receipts rose 0.5 percent to C$41.0 billion ($37.2 billion), Statistics Canada said today in Ottawa, matching the median of a Bloomberg survey with 19 responses. The Ottawa-based agency revised its estimate for January’s gain to 0.9 percent from 1.3 percent.

The data supports the Bank of Canada’s forecast last week for a “gradual strengthening” of the world’s 11th largest economy, when it projected growth of 2.3 percent this year from 2.0 percent in 2013. The country’s recovery hinges on an upturn in exports and investment, the central bank said. Governor Stephen Poloz remained neutral on the direction of his next interest-rate move, saying he will downplay a quickening of inflation this year with companies still slow to spend.

“While February’s numbers were basically as expected, the negative revisions to the prior month and soft volume figure could provide a degree of support to bonds,” and weigh on the Canadian dollar, CIBC World Markets economist Peter Buchanan said in a research note.

The volume of sales, a measure that excludes price changes, rose 0.1 percent in February.

Market Reaction

Canada’s dollar fell 0.2 percent to C$1.1048 per U.S. dollar at 10:31 a.m. in Toronto. One loonie, as the Canadian currency is known, buys 90.51 U.S. cents. Two-year yields declined to 1.06 percent, from 1.07 percent yesterday.

Wholesalers posted a second straight month of gains in February, led by increased shipments of motor vehicles, Statistics Canada reported yesterday.

Retail sales at health and personal care stores, including pharmacies, rose 2.6 percent to C$3.11 billion in February, Statistics Canada said. General merchandise stores, which includes department stores, posted a 1.4 percent increase to C$5.22 billion. Motor vehicle and parts sales were little changed at C$9.48 billion.

Sales rose in 7 of 11 categories making up 56 percent of retailing, Statistics Canada said.

Sales excluding motor vehicles and parts climbed 0.6 percent in February. Economists surveyed by Bloomberg forecast a 0.5 percent increase for that measure.

The volume of sales, a measure that excludes price changes, rose 0.1 percent in February.

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