Canadian retail sales increased in October, the eighth gain in 10 months, led by automobiles and clothing stores, the national statistics agency said.
Sales rose 0.8% from the previous month to $35.3 billion, Statistics Canada said today in Ottawa, matching the median estimate of 19 economists surveyed by Bloomberg. Automotive sales rose 3% and clothing sales rose 1.9%.
Consumers are key to the Bank of Canada’s economic forecast, with consumption pegged to account for more than half of a 3% expansion next year as a strong dollar restrains exports.
To support consumer and business spending, Governor Mark Carney cut the bank’s benchmark interest rate to a record low 0.25% in April and has pledged to keep it there through June 2010 unless the inflation outlook changes.
"In the months ahead, with Canadian labour market conditions expected to be mixed, consumer spending growth should be stop-and-go, but more often 'go,'" Millan Mulraine, an economist at TD Securities in Toronto, wrote in a note to clients before the report.
Canada’s unemployment rate was 8.6% in October, near an 11-year high and up from 6.6% at the end of last year. Unemployment will average 8.7% in the first three months of next year and drop to 8.3% in the third quarter of 2010, according to a Bloomberg survey of economists.
Sales were higher in five of eight major retail components tracked by Statistics Canada.
Building and outdoor home supply store sales rose 1.2%, while food sales fell 1.2% and there was a 0.9% decline at pharmacy and personal care stores. Sales in the miscellaneous retailers category were little changed.
Excluding sales of new cars and parts, retail sales rose 0.2%. The increase also matched economist predictions in the Bloomberg survey.
Statistics Canada revised the September gain in total retail sales to 1.1% from 1%, and the rise in ex-auto sales to 1% from the 1.1 percent originally reported.
Retail sales fell 1.4% in October from the year-ago month, the agency said.
