ottawa<u+2014>retail sales in canada climbed in september on strong demand for new cars and gasoline purchases, in an early sign the liberal government<u+2019>s fiscal-stimulus plan is beginning to lift domestic demand. the value of retail sales rose 0.6% in september to a seasonally adjusted 44.38 billion canadian dollars ($33.08 billion), statistics canada said tuesday. that matched market expectations, according to economists at royal bank of canada . september<u+2019>s monthly gain was the biggest since april. the august retail data were revised to show a slight 0.1% increase in retail sales, compared with an earlier estimate of a 0.1% decline. in volume terms, retail sales advanced 0.6% in september, marking the biggest gain since february. on a year-over-year basis, retail sales jumped 2.5%. economists have been waiting for a healthy pop in retail sales in canada after the liberal government in late july began sending checks to families with young children as part of a tax break. the canadian government has pledged tens of billions of dollars over a multiyear period to help stoke growth and offset the hit sustained by the energy sector from lower commodity prices. <u+201c>the uptick after a series of soft retail reports is a relief,<u+201d> said doug porter, chief economist at bmo capital markets. the retail report marks the final major piece of economic data before statistics canada issues economic-growth figures for september and the third quarter next week. even with the retail gain, economists expect a modest advance in september gross domestic product after weak showings from manufacturing and wholesalers. canada<u+2019>s economy continues to struggle as it adjusts to lower commodity prices. bank of canada governor stephen poloz said central bank officials <u+201c>actively discussed<u+201d> last month adding further monetary easing before opting to keep the policy rate at 0.5%. there is concern the recent climb in bond yields in the aftermath of president-elect donald trump <u+2019>s election victory could slow canadian domestic consumption further, given canadian households elevated debt levels. higher yields tend to translate into higher borrowing costs and interest rates on loans and lines of credit. before tuesday<u+2019>s release, bank of nova scotia economists said the retail estimates would offer a <u+201c>definitive<u+201d> look at whether the canadian government<u+2019>s fiscal-stimulus plan is starting to work its way through the economy. retail sales in september rose in seven of the 11 categories tracked by statistics canada. the biggest contributor to overall sales was the auto sector. sales at motor vehicles and parts dealers climbed 2.4% to c$11.24 billion. the auto results were powered by a 2.8% increase in demand for new cars, or the biggest month-over-month gain in eight months. statistics canada said when the auto component is excluded, canadian retail sales were unchanged from the previous month. it also said that, when auto-sector and gasoline sales are excluded, retail sales fell 0.2% in september. gasoline sales in september rose 0.9%. weighing on the retail results were receipts from food and beverage stores. sales in this category fell 0.8% in september. according to canadian consumer-price data for september, the cost of food purchased at grocery stores recorded their first year-over-year decline since march 2008. write to paul vieira at paul.vieira@wsj.com
canada retail sales rise 0.6% in september - wsj
paul vieira