Canadian retail sales grew much faster than expected in June, the latest in a series of upbeat economic numbers to raise hopes the economy is pulling out of recession. Sales jumped 1 percent from May, far surpassing forecasts for a 0.2 percent increase, Statistics Canada said on Monday.
But much of the gain was due to rising prices, especially for gasoline, while the volume of sales inched up by just 0.4 percent. Sales were down 4.4 percent from a year earlier. The report points to a recovery in consumer demand during the second quarter, after two straight quarters of sharp declines in spending.
"All in, the month of June is shaping up nicely with manufacturing, wholesale and now retail sales all posting upside surprises and suggesting that the economy is stabilising and beginning to transition over to the recovery phase," said Stewart Hall, an economist at HSBC Canada.
The Canadian dollar rose to its highest level in over two weeks versus the greenback after the data, climbing to C$1.0733 to the US dollar, or 93.17 US cents, from about C$1.0780, to the US dollar or 92.76 US cents. Economists expect the economy to contract in the second quarter but some now see gross domestic product growing in June, which would be the first monthly expansion in 11 months.