MNI: Canadian June Retail Sales Rise Most Since December

Canadian flash retail sales rose in June at the fastest pace since December when the government offered a temporary sales-tax break, showing resilience amid fears a U.S. trade war would trigger a recession. 

The June sales gain of 1.6% reported by Statistics Canada Thursday followed a 1.1% fall in the official figure for May. 

The report is in line with recent BOC polls showing fewer respondents expecting a worst-case scenario and follows a rebound in employment that led many investors to abandon bets the central bank would cut interest rates next week. The Bank had earlier cut seven times beginning last June and that support showed up in the 4.9% rise in sales since May of last year. 

May's decline was led by the 4.6% fall in new cars. Core sales that exclude autos and gasoline were little changed for a second month. Overall sales for the second quarter climbed 0.4%, the slowest pace in a year. 

"Feedback from respondents for May highlighted the effects of trade tensions between Canada and the United States on Canadian retail businesses. Supplementary questions asked to respondents show that 32% of retail businesses were impacted by the trade tensions in May, compared with 36% in April. The most common impacts in May were price increases, change in demand for product and increased expenses for raw materials, shipping or labour," Statistics Canada said. 

StatsCan also reported flash factory sales rose 0.4% in June led by energy and food, again showing resilience in an industry being hit by U.S. tariffs.