Retail sales in Canada came in better than expected in October as more people purchased cars, highlighting the effects of government income support and a recovering labor market.
Sales increased 0.4% from the prior month, Statistics Canada said Friday in Ottawa, the sixth-straight monthly boost. Economists predicted no change. The September figure was modified to a gain of 1.9% from 1.1% initially. Retail receipts were 4.5% above pre-coronavirus pandemic levels.
Retail sales rebounded quickly after cratering in April and have held up better than expected since then. The most attractive government support measures in the Group of Seven have bolstered households checking accounts, and the country’s labor market is recovering more quickly than others, leaving customers in relatively decent shape.
It is not clear how long the strength will last, given the increase in coronavirus cases and renewed restrictions in many provinces. Until now, 507,795 people have been infected with coronavirus in Canada, of which 14,228 have lost their lives and 416,708 were cured.
Initial estimates for the agency show sales were flat in November, but even that accounts for an upside surprise, given U.S. data that showed a decline of 1.1%.
“It’s kind of surprising we didn’t see a pullback in November at all,” said Nathan Janzen, an economist at Royal Bank of Canada. “But we know stores have more e-commerce in place, more courier drivers in place than there were in the spring.”
Sales increased in 6 of 11 sub sectors, with car receipts up 1.5%. Sales at furniture stores were also strong, together with sporting goods and electronic retailers.
Excluding vehicles, retail was flat in October, versus a forecast for a 0.1% boost.
When it comes to volume terms, sales edged up 0.2% in October.
