Canadian retail sales rose in the first month of the year as consumer demand remained strong in the face of a surge in interest rates over the past year, despite preliminary estimates pointing to weak sales in February.
Sales rose 1.4% in January from the previous month to 66.37 billion Canadian dollars, equivalent to about US$48.38 billion, Statistics Canada reported Friday. The data was stronger than the data agency's preliminary estimate last month for a 0.7% rise, after retail sales were revised down to unchanged in December.
Compared to the previous year, sales were 5.0% higher in January.
Early indications from the company indicated that retail sales weakened in February. According to Statistics Canada, preliminary data showed a decline in wholesale and factory sales, while supporting expectations of slower economic growth.
The Bank of Canada earlier this month left its benchmark interest rate unchanged in anticipation of inflation continuing to cool from last summer's peak. The BoC predicted economic growth would stall for several quarters before recovering later this year, saying it would monitor the economy's response to a string of policy rate hikes that pushed it 4.25 percentage points to a 15-year high of 4.5%.
Annual gross domestic product was unchanged in the final quarter of last year following five consecutive quarterly increases, largely due to a slowdown in building inventories.
Preliminary data also released on Friday by the agency showed a 1.6% drop in wholesale sales on the month in February and a 2.8% drop in manufacturing sales, after both segments posted higher sales in January.
