Canadian retail sales fell more than expected in July, with vehicle and auto-parts dealers accounting for most of the decline, Statistics Canada said Thursday.
The federal agency said sales were down 0.6% to $37.5 billion in during the month, following an upwardly revised 0.8% gain in June -- which had been the third consecutive monthly advance.
Retail sales declined in seven of 11 sub-sectors tracked by the agency. In volume terms, sales were down 0.9%.
Economists had expected sales to decline 0.3% in July.
"The 3.5% drop in sales at new car dealers offset gains made in June," Statistics Canada said.
Used car sales fell 2%, while and auto parts, accessories and tire stores recorded at 0.4% decline. Those declines were offset by a fourth consecutive monthly gain in the "other motor vehicle dealers," which were up 2.3%, it said.
Still, experts said, "sharp rebounds in exports and manufacturers' shipments (in July) suggest the economy grew about 2% in Q3 after contracting slightly in Q2."
On Tuesday, the International Monetary Fund downgraded its outlook for Canada's economic growth to 2.1% this year and 1.9% next, from its April estimates of 2.90% and 2.6%, respectively.
For its part, the Bank of Canada expects a return to growth in the second half of this year, after the economy contracted 0.4% in the second quarter.
