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Canadian retail sales edge higher in August

Shoppers in Toronto.

Fernando Morales/The Globe and Mail

Retail sales in Canada rose 0.3 per cent to $39.1-billion in August, Statistic Canada reported Tuesday, disappointing economists even though the numbers met consensus forecasts.

"Digging beneath the surface, the impact on GDP looks disappointing, as in real terms, sales volumes were down 0.3 per cent, with all of the rise in nominal sales therefore attributable to inflation, including a 2.9 per cent rise in gas station sales," Avery Shenfeld, CIBC World Markets chief economist, wrote in a commentary.

"Sales were otherwise mixed across sectors, with gains in general merchandise but a drop in clothing, health and autos," Mr. Shenfeld said.

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Statistic Canada said sales at general merchandise stores increased for a second consecutive month, up 0.6 per cent.

However, department store sales edged up just 0.2 per cent while those at miscellaneous retailers declined for a second month in a row, falling 3.1 per cent.

Robert Kavcic, senior economist at BMO Capital Markets, also noted that "underlying spending, excluding autos and gas, was somewhat disappointing, falling 0.1 per cent and continuing the choppy performance seen in recent months."

Sales at furniture and building products stores, down 0.1 and 0.4 per cent respectively, were consistent with softening housing market trends, Mr. Kavcic added.

Regionally, British Columbia was the weak spot in August, with retail sales falling 0.9 per cent amid declines in housing-related sectors, Mr. Kavcic said, noting that the housing sales slump hit that province the hardest.

The Prairies and Ontario were strong spots, with Alberta and Saskatchewan in particular continuing to show the strongest consumer spending trends in the country, with retail sales growth running at 8.1 and 9.3 per cent respectively year over year.

Both provinces are fuelled by healthy labour markets and strong population growth, he said.

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