Canada retail sales jump in November, pointing to boost to weak economy

Fri Jan 22, 2016 10:04am EST
 
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By Leah Schnurr

OTTAWA (Reuters) - Canadian retail sales jumped far more than expected in November on higher sales of new cars and Black Friday purchases, pointing to some much-needed vigor for a struggling economy.

Separate data showed the annual inflation rate rose in December as food prices surged, suggesting consumers were feeling the impact from the weaker Canadian dollar.

But analysts focused on the surprisingly strong retail figures, which raised optimism that fourth-quarter data will not be as weak as anticipated.

Sales rose 1.7 percent, Statistics Canada said on Friday, the biggest increase since June 2014 and topping forecasts for 0.2 percent. Volumes rose 1.5 percent.

Canada emerged from a mild recession in the third quarter, but lackluster activity and the drop in oil prices have prompted concern of another downturn. The Bank of Canada this week said the economy stalled in the fourth quarter.

"The retail data was very strong," said TD Securities senior rates strategist Andrew Kelvin. "It suggests that November was a stronger month for the Canadian economy than October was, and it will put some upside pressure on the (fourth-quarter gross domestic product) reading."

The Canadian dollar firmed slightly following the reports.

Sales increased in November across sectors, except for at gasoline stations due to lower prices at the pump.   Continued...

 
A young customer checks out a Ferrari at a luxury car dealership in Vancouver, British Columbia, in this picture taken October 10, 2015.  REUTERS/Julie Gordon