Retail sales edged up in July, but economists say it will take further interest rate cuts to really spark lasting activity.
Statistics Canada said Friday that retail sales rose 0.9% to $66.4 billion in July, helped by stronger new car sales.
The agency said sales were higher in seven of the nine subsectors it tracks with sales at motor vehicle and parts dealers up 2.2%, boosted by a 2.3% increase in sales at new car dealers.
“It’s rare to see a positive surprise from Canadian consumers these days, but the July retail sales report delivered,” Shelly Kaushik, an economist with BMO Capital Markets, said in a note to investors.
The period the figures covered was largely marked by people anticipating and then delighting in the Bank of Canada‘s decision to cut its key interest rate in July. The central bank cut rates again in September to 4.25%.
The rate has weighed on shoppers, particularly those looking to make big purchases or take out mortgages, but as it’s been dropping, it’s delivered some relief to wallets.
That was reflected in core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers. They rose 0.6% in July.
Sales at food and beverage retailers increased because of a 1.2% jump in sales at supermarkets and other grocery retailers, a 2.1% climb at specialty food retailers and 0.4 % rise at convenience retailers and vending machine operators.
Higher sales were also reported at health and personal care retailers in July.
READ:Â Food items that got more expensive in August, and which ones saw prices go down