UPDATE 2-Canada May retail sales leap 1.9 pct, should boost Q2 growth

Tue Jul 23, 2013 10:49am EDT
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* Retail sales record biggest jump since March 2010

* Autos help drive sales to record high

* Canadian dollar strengthens on the news

By David Ljunggren

OTTAWA, July 23 (Reuters) - Canadian retail sales in May jumped by 1.9 percent from April to hit a record high, a clear sign that second-quarter growth could be significantly stronger than expected.

The advance - far greater than the 0.4 percent growth predicted by analysts - was the largest rise since the 2.8 percent month-on-month leap recorded in March 2010, Statistics Canada said on Tuesday.

Analysts said the strong numbers, driven in part by higher auto sales, meant annualized growth in the second quarter was set to eclipse the Bank of Canada's July 17 prediction of just 1 percent. First-quarter growth was 2.5 percent.

"As the U.S. struggles to hit 1 percent annualized second-quarter GDP growth, we think that this print means Canada could easily double or as much triple that growth rate," Derek Holt of Scotiabank Economics said in a note to clients.

Higher sales were reported in nine of the 11 subsectors, representing 94 percent of total retail trade. In volume terms, sales were also up 1.9 percent.   Continued...