MNI: Canada Flash Jul Retail Sales Fall 0.8%, Weak Start To Q3

Canadian retail sales fell 0.8% in July according to Statistics Canada's advance estimate, pointing to a weak start for the third quarter.

That followed June's 1.5% gain according to Statistics Canada's official figures Friday from Ottawa, which matched an economist consensus. Gains in June came in all nine sub-sectors. Core sales excluding autos and gas rose 1.9% in June led by clothing (5.1%), building materials (2.4%) and food and beverage (2.3%). 

July's decline adds to other recent weakness with StatsCan confirming sales fell 1.2% in May led by new car sales after the US imposed tariffs. At the same time the agency found fewer retailers feeling the pinch of the trade war, with 27% saying it's hurting operations in June compared with 32% in May. Respondents said they were impacted by "price increases, change in demand for product and delays in the supply chain."

While many economists predict the economy will falter in the second half of this year, StatsCan also reported the strongest 12-month rise in sales in three years with a 6.6% increase. That likely reflects the boost of the Bank of Canada's seven earlier interest-rate cuts. 

The Bank held its key rate at 2.75% last month for the third straight meeting. Some analysts expect the central bank to keep rates steady at the Sept. 17 meeting as core CPI remains at the higher end of BOC's target range. 

As for the trade dispute, Canada and the US have failed to reach a deal after months of talks. Prime Minister Mark Carney and President Donald Trump had a call Thursday and the PM's office reported no clear breakthrough.