OTTAWA (Reuters) -Canadian retail sales grew by 0.8% in March from February, more than analysts had forecast, and looked set to have increased by 0.5% in April, Statistics Canada data indicated on Friday.
The largest increase was the 4.8% gain posted by motor vehicle and parts dealers, the first rise in three months. Analysts suggested one reason was consumers rushing to buy cars before U.S. tariffs took effect in April.
Analysts had expected a 0.7% increase in March.
“Canadian consumers haven’t tightened the purse strings much it seems in the face of tariff uncertainty,” said Andrew Grantham, senior economist at CIBC Capital Markets.
In March, sales were up in six of nine subsectors, representing 58.9% of retail trade. In volume terms, retail sales increased by 0.9%.
Bank of Canada Governor Tiff Macklem said on Thursday he expected second-quarter growth to be “quite a bit weaker” than the first quarter, and that it could be worse in subsequent quarters if the uncertainty around tariffs continued.
Currency swap market bets show odds of a 25 basis point rate cut in June at 32%, unchanged from before the data release.
“We still judge that the Bank will cut following the recent declines in private sector employment, but it will be a close call,” said Stephen Brown, deputy chief North America economist at Capital Economics.
The central bank last month forecast annualized first-quarter GDP would be 1.8% but did not give any other projections, citing uncertainty over tariffs. Statistics Canada is due to issue first-quarter GDP data on May 30.
(Reporting by David Ljunggren and Dale Smith; Editing by Andrea Ricci)
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