The Financial Post reports in its Saturday edition that retail sales fell 2.5 per cent to $61.3-billion in July, the first drop in seven months as sales at gasoline stations and clothing stores decreased, Statistics Canada said Friday.
A Canadian Press dispatch to the Post reports that the drop was deeper than the 2-per-cent drop that Statscan had predicted in its early estimate for the month. Its initial estimate, however, for August pointed to a gain of 0.4 per cent for the month.
CIBC economist Karyne Charbonneau said retail sales had been more resilient than expected in the past couple of months given high inflation, rising interest rates and a shift to service consumption.
Mr. Charbonneau wrote in a report: "The weaker-than-expected July data finally provides some evidence that the expected shift away from goods consumption and the impact of higher rates are starting to materialize more meaningfully. This is the type of data the Bank of Canada will be looking for as it enters what should be the last stage of its hiking cycle. We continue to expect another (half percentage point) increase in October, before further evidence of a cooling economy allows the bank to pause its rate increases."
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