Canadian retail sales continue climb in September

Mon Nov 23, 2009 4:11pm EST
 
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By Louise Egan

OTTAWA (Reuters) - Canadian retail sales grew twice as much as expected in September as consumers ramped up spending on a wide range of goods, suggesting the economy grew at a healthy clip in the month.

Retail sales jumped 1 percent from August with the biggest gains in the auto sector and at supermarkets, Statistics Canada said on Monday, which beat market expectations for a 0.5 percent increase. Sales were still 3.3 percent lower than a year earlier.

In volume terms, used to calculate real gross domestic product, sales increased 1.2 percent. The data helped lift the Canadian dollar.

Retail sales also increased 1 percent in August, according to Statscan's revised figures, and have grown in every month this year except April and July.

"September's sharp pop higher is a strong positive to monthly GDP on the heels of a generally decent tone across a number of indicators," said Derek Holt and Karen Cordes, economists at Scotia Capital.

The Canadian dollar firmed against the U.S. dollar after the report, helped also by stronger equity and commodity prices. The currency rose as high as C$1.0544, or 94.84 U.S. cents from Friday's close of C$1.0699 to the U.S. dollar, or 93.47 U.S. cents.

The auto sector contributed most to the retail gains in September, climbing 1 percent thanks in part to a 2 percent jump in used and recreational vehicles and parts.

But sales expanded overall in six of the eight retail sectors and, excluding autos, they rose 1.1 percent. Food and beverage stores sold 1.3 percent more than in the previous month, led by supermarkets. Sales also grew for general merchandise stores, miscellaneous retailers, furniture, home furnishings and electronics stores and pharmacies.   Continued...