Motor vehicle and parts dealers saw a 2.2% increase in July, while sales at gasoline stations and fuel vendors were down 0.6%.
Core retail sales were led by food and beverage retailers, and general merchandise retailers (both up 0.8%). Building material and garden equipment and supplies dealers saw the largest decrease in sales at -1.4%.
While the gain in overall retail sales have been welcomed, leading Canadian economists have expressed concern about the broader weakness in the economy, with a softening labour market and concern that GDP may fall short.
RBC economists Nathan Janzen and Abbey Xu expect that Friday’s GDP report may show a 0.1% increase in July.
“The increase we expect in July is still historically soft and would leave output tracking another per-capita GDP decline in Q3—marking the eighth out of the last nine quarters,” they wrote in a client note.