Canadians stepped up their spending in March to help retail sales bounce back strongly from a disappointing February.
Retail sales rose 0.7 per cent month-on-month in March, according to figures released by Statistics Canada on Friday. That beat market expectations for a smaller 0.3 per cent gain and compares favourably to the 0.4 per cent decline recorded in the prior month.
Much of the gain was driven by the auto sector, the agency said in a statement.
“Motor vehicle and parts dealers (+3.2 per cent) recorded the largest gain in dollar terms across all subsectors,” it said. “The increase was largely attributable to higher sales at new car dealers (+3.8 per cent). Used car dealers (+2.7 per cent) and automotive parts, accessories and tire stores (+1.2 per cent) also posted higher sales.”
The figures should provide some comfort to Canadian policymakers, who have been concerned that economic growth might have stalled during the first quarter following a slew of lackluster data on trade, manufacturing and retail.
A separate report released by Statistics Canada on Friday also showed that inflation remains subdued, a positive development that should allow the country’s central bank to stay put on interest rates.
The pace of annual inflation held steady at 1.6 per cent in April, as falling food prices continue to help keep prices down for consumers. It is unchanged from the pace recorded in March and lower than the rise to 1.7 per cent the market had expected.