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Carrick: Canadian retail sales advanced strongly in February

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by -Alex Carrick, Canadata Chief Economist last update:Sep 10, 2014

Statistics Canada’s national retail sales report for February 2010 was released today. It shows a continuing strong level of retail sales activity across most of the country.

Statistics Canada’s national retail sales report for February 2010 was released today. It shows a continuing strong level of retail sales activity across most of the country.

The month-to-month gain in Canada-wide retail sales in the latest month was +0.5% and the year-over-year increase was +6.4%.

An increase of 5.0% or higher in year-over-year current dollar retail sales establishes a good grounding for the economy. That’s because after taking out a “normal” inflation rate of 2.0%, real consumer spending is advancing by 3.0% or more.

Consumer spending in Canada makes up 55% of total gross domestic product (GDP).

At this time, with the latest Consumer Price Index figure at 1.4% year over year, the rate of real consumer spending is increasing even faster than 3.0%.

A GDP growth figure for Canada of +4.0% in 2010 is not out of the question.

There was early indication that retail sales would be strong in February. The data on motor vehicle sales, which is released about a week in advance of retail sales, recorded an 8.1% jump year over year.

The motor vehicle sector makes up about 20% of total retail sales. Statistics Canada has noted preliminary indications that March motor vehicle sales will not be as strong.

Regionally, Ontario, which accounts for about one-third of national retail sales, recorded a month-to-month advance of only +0.1% and a year-over-year gain of only +4.4% 4, compared with the national figure of +6.4%.

Total Canada retail sales are now almost back to where they were before the recession. The plummet in retail sales during the recent most difficult times began in October 2008, when the stock market crashed. They bottomed in early 2009 and have been on an upward path for a little more than twelve months since then.

last update:Sep 10, 2014

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