OTTAWA (Reuters) - Canadian retail sales jumped more than expected in October, showing consumers were still happy to spend despite uncertain times, raising hopes the economy might eke out some growth at the start of the fourth quarter.
Pushed up by stronger sales of motor vehicles and gasoline, retail sales increased by 1.0 percent from September, the third consecutive monthly gain. Market operators had predicted a 0.5 percent increase.
Analysts said the healthy figure could boost October’s GDP data, due on Friday, after earlier gloomy data for trade and manufacturing. The market is currently predicting no growth in October from September.
“Canadians continue to spend amidst a deteriorating global backdrop. Today’s positive print in volumes will bode well for the industry level monthly real GDP,” said TD Securities strategist Mazen Issa, who predicted 0.1 percent month-on-month growth.
There was little effect on the Canadian dollar, which at 9:45 a.m. (1445 GMT) was at C$1.0285 to the U.S. dollar, or 97.23 cents, compared with C$1.0281, or 97.27 U.S. cents, shortly before the retail figures were released.
Statscan reported gains in seven of the 11 sectors, representing 76 percent of retail sales, while sales volume rose 0.6 percent. Overall retail sales were 4.4 percent higher than in October 2010.
“Spending is still showing serious signs of life despite high debts, downbeat confidence and a drumbeat of negative headlines,” said Douglas Porter, deputy chief economist at BMO Capital Markets.
“While we expect sales to cool slightly by year-end amid soft job and wage growth, consumers are hardly battening down the hatches.”
The motor vehicles and parts sector reported sales increased by 2.0 percent from September, thanks largely to a 2.4 percent rise in sales at new-car dealers. Higher prices helped push gasoline sales up by 1.8 percent.
Stripping out sales of motor vehicles and parts, retail sales rose by 0.7 percent.
Reporting by David Ljunggren; editing by Rob Wilson