Canada May Retail Sales Match 1.0% Forecast, June Points Higher

Canada's retail sales climbed 1.0% in May, matching analyst expectations precisely, Statistics Canada reported Friday, as spending picked up across all nine subsectors of the retail economy. The headline result follows a downwardly revised April gain of 0.4%, trimmed from the previously reported 0.5%, suggesting the consumer recovery has been steadier but slightly softer than first measured.

Gasoline stations and fuel vendors led the monthly advance in nominal terms, though the energy sector told a different story in volume terms — unit sales at pumps actually fell 2.7% in May, meaning higher prices rather than stronger demand drove the dollar gains. Stripping out autos, retail sales rose 1.2%, falling short of the 1.4% consensus estimate. Core retail sales — excluding both gasoline and motor vehicles — expanded 0.9%, an improvement over last month's 0.7% reading, pointing to broadening consumer activity beyond volatile categories.

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At the provincial level, British Columbia posted the largest dollar-term gain, with sales surging 2.1% on strength at motor vehicle and parts dealers. Vancouver's metro area outpaced the national average with a 3.4% jump. Ontario added 0.5%, aided by gasoline station revenues, while the Toronto CMA saw a 0.8% rise. Nova Scotia was the sole province to contract, with retail sales dropping 0.8% as auto dealer revenue weakened.

Looking ahead, Statistics Canada's advance estimate for June points to a 0.4% increase, suggesting Canadian consumers remained engaged heading into summer despite ongoing trade uncertainty and cost-of-living pressures. Currency markets showed little reaction to the data — the USD/CAD pair held near 1.4087, essentially flat on the day and trading above its 100- and 200-hour moving averages, keeping near-term momentum tilted in favor of dollar buyers.

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