Canada: Goods consumption should once more contribute to growth in Q3 - NBF

Today’s data showed that retail sales rose 0.2% in September surpassing expectations. National Bank of Canada analyst, Jocelyn Paquet, points out that consumption should translate into a positive contribution to GDP in Q3. 

Key Quotes:

“September’s retail report was slightly better than expected, thanks in part to healthy sales numbers at food and beverages stores, general merchandise stores and auto dealers. The result would have been even better had it not been for a significant drop in outlays at gasoline stations, the latter largely attributable to a drop in prices. Indeed, without that category, sales progressed 0.4% in the month.”

“In real terms, total sales increased for the first time in four months in September and are now tracking a 1.5% annualized gain in Q3. That’s less than the 3.5% progression posted in the second quarter but should nonetheless translate into a positive contribution to growth from consumption.”

“Is also consistent with our call for a 1.8% annualized increase in real GDP in Q3, significantly less than the 2.9% figure posted in Q2.”

“With the price effect removed, retail sales advanced a decent 0.5% countrywide.”