OTTAWA (Reuters) — Canadian retail sales unexpectedly dropped 0.3 percent in August, pulled down by lower gasoline prices and weaker sales of new cars and food, according to Statistics Canada data released on Wednesday.
Analysts had forecast no change from July. August’s decline marked the second consecutive month-on-month fall after six months of gains and was the largest drop since the 1.1 percent decline seen in December 2013.
Sales were down in seven of the 11 sub-sectors, representing 76 percent of retail trade. Sales at gasoline stations dropped 2.1 percent, mainly reflecting lower prices at the pump.
However, sales rose 1.8 percent at general merchandise stores, with department store volume up 1 percent. Apparel and accessories stores registered their fourth increase in the past five months, as clothing store revenues were up 1.2 percent and footwear store sales ahead 1.9 percent.
Sales at motor vehicle and parts dealers declined 0.4 percent, dragged lower by a 0.6 percent drop in sales at new car dealers, while food and beverage stores saw a 0.4 percent decrease.
The data are unlikely to put much pressure on the Bank of Canada, which says it will not raise interest rates from near record lows until it sees signs of a sustained economic recovery.
The central bank is due to release its latest economic forecasts this morning.