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Canadian Retail Sales Hold Steady at $67.6 Billion in November – Statistics Canada

OTTAWA Jan 23— Canada’s retail sales remained steady in November at $67.6 billion, showing no change from October, according to Statistics Canada. However, early estimates suggest a strong recovery in December, boosted by the federal government’s temporary GST/HST holiday.

BMO senior economist Shelly Kaushik noted that if the estimated 1.6% increase in December retail sales is confirmed, it would be the largest monthly gain in two years. Kaushik attributed November’s weaker sales to the late timing of Black Friday and the mid-December launch of the GST/HST holiday, which may have delayed consumer spending.

The federal government introduced a temporary tax break on select items starting December 14, lasting until February 15, to encourage holiday shopping. Kaushik said that while this measure may temporarily boost sales, future consumer spending will depend on lower interest rates and potential trade uncertainties.

CIBC senior economist Katherine Judge pointed out that recent spending trends suggest lower interest rates are helping to support consumer demand, but more rate cuts will be needed, especially with inflation under control and concerns over potential U.S. tariffs on Canadian exports.

In terms of sector performance for November, motor vehicle and parts sales increased by 2%, while gasoline stations saw a 0.7% rise. However, food and beverage retailers experienced a 1.6% decline, with supermarkets and grocery stores dropping 1.5%. General merchandise sales also fell by 1%.

Core retail sales, which exclude auto and fuel sales, declined by 1%, while overall retail sales volume dropped by 0.4% for the month.

The latest retail data comes just ahead of the Bank of Canada’s interest rate decision on January 29, where policymakers will assess economic conditions and release their monetary policy report.

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