December retail sales worse than expected

February 23, 2009

23 February 2009

December retail sales worse than expected

The following is excerpted from the February 23, 2009 edition of "Financial Post".

Sales at retail outlets plunged 5.4% in December - the biggest monthly decline in 15 years - as the economic downturn forced consumers tightened their belts, Statistics Canada said Monday.

Most economists had expected a decline of 3%. In November, sales were down 2.4% - the biggest monthly decline since January 1998.

"This was the largest monthly decline in over 15 years, exceeding the 4.5% sales drop in January 1998 when an ice storm crippled part of the country," Statistics Canada said. "Combined with the declines observed since October, retail sales in December were at their lowest level since November 2006."

The federal agency said declines in December were recorded across all sectors, with the automotive industry accounting for three-quarters of the drop. Excluding the auto sector, retail sales were down 1.8%.

Alberta saw the biggest decline at 6.2%. "Sales in this province have been generally weak throughout 2008 after reaching a plateau in 2007," the agency said.

Ontario posted a 6% drop, while Saskatchewan sales fell 5.8% and British Columbia 5.6%...

The retail numbers add further pressure on the Bank of Canada to cut its key lending rate - already at an all-time low of 1.0% - to encourage more spending by consumers to help pull the country out of recession. The central bank is widely expected to lower its benchmark rate by another 50-basis points at its March 3 meeting.

On Friday, Statistics Canada reported that the consumer price index slipped to 1.1% last month, down from 1.2% in December, reinforcing the view of many that inflation is no longer a major concern.


Topic(s): 
Canadian Economy & Politics
Information Source: 
Canadian News Channel
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