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Consumer spending slows as vehicle sales decline

Canadian retail sales fall 0.6% in January, beating expectations

Today, March 21, 2025, Statistics Canada released retail sales data for January, showing a 0.6% decline compared to December, with sales totaling $69.36 billion. Data details: Retail sales (monthly): Decreased 0.6%, exceeding expectations for a 0.4% decline. Core retail sales (excluding autos): Increased slightly by 0.2%, compared to expectations for a 0.1% decline.

 Most Affected Sectors:

• Automotive and Parts Dealers: They experienced a significant decline in sales, contributing significantly to the overall decline.
• Gas Stations: Sales increased, but this was not enough to offset declines in other sectors.

Future Outlook:

Preliminary estimates for February indicated a continued decline in retail sales of 0.4%, reflecting ongoing challenges in the Canadian retail sector.

Importance of the Data:

Retail sales are an important indicator of economic health, reflecting consumer spending, which constitutes a significant portion of economic activity. A sustained decline could signal a slowdown in economic growth and impact future monetary policy decisions.