Statistics Canada says retail sales rose 0.6 per cent to $66.5 billion in September led by increases at motor vehicle and parts dealers.
The agency also says its early estimates suggest retail sales increased 0.8 per cent in October, though it cautioned the estimates would be revised.
For September, sales at motor vehicle and parts dealers rose 1.5 per cent, led by a 2.4 per cent gain in sales at new car dealers, while used car dealers saw a two per cent drop.
Statistics Canada says core retail sales – which exclude gasoline stations, fuel vendors and motor vehicle and parts dealers – fell 0.3 per cent in September.
Sales at food and beverage retailers fell 0.4 per cent, while sales at sporting goods, hobby, musical instrument, book and miscellaneous retailers dropped 1.6 per cent.
In volume terms, overall retail sales increased 0.3 per cent in September.
“Canadian retail sales were firmer than expected in September, though most of the strength was concentrated in autos and gasoline,” Shelly Kaushik, an economist with BMO Economics, said in a note Friday.
“Even so, volumes managed to eke out a small positive for the month. Still, elevated interest rates and mortgage resets still coming, suggest consumers will remain cautious.”
That sentiment was echoed by Desjardins’ principal economist, Marc Desormeaux.
“Despite the headline rise in September, it’s clear that consumers are feeling the pinch from high interest rates, still-elevated inflation, and a cooling labour market,” he said in a note Friday.
“We expect growth to slow more meaningfully in the coming months as Canadians increasingly feel the full impacts of the central bank’s aggressive tightening campaign.”
The Bank of Canada’s final rate decision of the year comes Dec. 6.
-With files from Global News
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