Canada: Retail sales roared back in August then took another breather in September – CIBC
|Data released on Friday showed an increase in August retail sales in Canada of 2.1%, slightly above the 2% expected. For September preliminary data points to a contraction. According to analysts at CIBC markets won't take much joy in the August increase in retail sales, with the flash estimate of September looking weaker than anticipated and coming alongside a similarly disappointing manufacturing print for that month.
Key Quotes:
“Retail sales roared back in August, but then took another breather in September. With a yo-yo in sales continuing into the end of the third quarter, the level of sales in September was back where it stood in June and July. That said, while goods sales continued to be plagued by the global semiconductor shortage, the employment data suggested that services sectors appeared to be gaining strength heading into the end of the quarter. As a result, we continue to expect that the economy was able to continue to soak up more slack in September.”
“Statistics Canada's flash estimate of September retail sales revealed an ugly 1.9% retreat after the rebound in August. The separately-released sneak peak of manufacturing sales for the same month showed a similarly dreadful drop of 3.2%. Both, appear to have been impacted by the supply crunch in the auto sector, with the factory report directly referencing the transportation equipment industry as the main source of weakness.”
“The ugly flash readings for retail sales and manufacturing will dent our previously heady GDP forecast for the month. However, while goods sectors were plagued by supply chain challenges, according to the Labour Force Survey data, activity across a range of services sectors was increasing. The federal election would have helped GDP during the month too. As a result, we're still comfortable forecasting that the economy expanded by roughly 0.5% during the month.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.