**Canada June Retail Sales Edge Up Slightly on Autos, but Underlying Trend Remains Weak**.
According to Statistics Canada, Canadian retail sales recorded a modest increase of 0.6% in June, reaching C$61.1 billion, slightly above market expectations. However, excluding the automotive sector, sales actually declined by 0.1%, indicating a subdued underlying trend..
**Automotive Sales Boost**.
The increase in overall retail sales was primarily driven by a surge in automotive sales, which jumped by 3.8%, contributing 0.4 percentage points to the overall growth. New car sales rose by 5.2%, while sales of gasoline at service stations increased by 2.4%..
**Broad-Based Decline**.
Despite the boost from automotive sales, a broad range of other sectors experienced declines. Sales in the clothing and accessories stores category fell by 1.8%, marking the third consecutive monthly decrease. Sales in furniture and home furnishings stores dropped by 1.5%, continuing a downward trend that has persisted since April. Department stores also recorded a decline of 1.0%, extending a string of weak results..
**Weak Underlying Trend**.
Excluding the automotive sector, retail sales actually decreased by 0.1% in June, suggesting that the underlying trend remains weak. This decline was widespread, with nine out of 11 subsectors reporting lower sales compared to May..
**Inflation Impact**.
The Statistics Canada report also highlighted the impact of inflation on consumer spending. The consumer price index (CPI) rose by 8.1% year-over-year in June, the largest increase since 1983. This inflationary pressure is putting a strain on household budgets, particularly for essential items like food and energy..
**Outlook Uncertain**.
The outlook for Canadian retail sales remains uncertain. While the automotive sector is providing some support, the broader trend suggests that consumers are becoming more cautious with their spending due to rising inflation and economic uncertainty..
**Conclusion**.
Overall, the June retail sales figures in Canada present a mixed picture. While the headline number showed a modest increase, the underlying trend remains weak, with many sectors experiencing declines. The impact of inflation on consumer spending is likely to continue to weigh on the retail sector in the coming months..
