MNI: Canadian Retail Sales Continue To See-Saw Through August

Canadian retail sales rebounded in August from a July decline, continuing a back-and-forth pattern in line with uncertainty created by the U.S. trade war.

Sales rose 1% in August according to Statistics Canada's flash estimate released Friday in Ottawa. The official reading for July showed a 0.8% decrease spread across eight of nine categories led by food and beverages. July's decline matched the median from a survey of economists. 

Retail sales have swung between gains and losses since April. The overall trend has stalled after solid gains in the second half of last year when the Bank of Canada began a series of seven interest-rate cuts. Governor Tiff Macklem returned to cutting Wednesday after three meetings on hold, citing a weaker job market and fewer signs of inflation pressure. 

The Bank predicts GDP growth at a 1% annualized pace in the third quarter though investors predict it will come in at half that pace. Consumers may be key to an economic rebound after output shrank in the second quarter with U.S. tariffs hurting exports while consumer spending was strong. There are potential drags emerging on household spending from rising unemployment and slowing population growth. Some households are also due to refinance five-year fixed-rate mortgages at higher rates in coming months.