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Vehicles at a Chevrolet dealership in Ottawa on Aug. 11.Sean Kilpatrick/The Canadian Press

Retail sales exceeded expectations to grow by 0.6 per cent in September from August, and were seen likely to gain 0.8 per cent in October, data showed on Friday.

Sales had been forecast to stay flat versus August. September retail sales totalled $66.46-billion, Statistics Canada said. The increase was led by motor-vehicle and parts dealers and gas stations.

“Canadian retail spending rebounded heading into the holiday season,” said Tiago Figueiredo, an economist at Desjardins Group. “After accounting for this latest data, our forecasts suggest little to no real GDP growth in the third quarter and we are only projecting a modest pickup for the fourth quarter.”

Excluding gasoline and auto sales, nominal core retail sales were lower by 0.3 per cent in September, Mr. Figueiredo said.

The economy may already have entered a shallow recession in the third quarter. Final third-quarter growth figures are due to be published next week.

After 10 interest rate increases between March of last year and July, Bank of Canada Governor Tiff Macklem said on Wednesday that they may be at their peak. Mr. Macklem said that there was no longer excess demand in the economy.

The bank has lifted its key overnight rate to a 22-year high of 5.00 per cent to tame inflation, which was 3.1 per cent in October. The central bank targets 2-per-cent inflation.

In September, retail sales were up in four of nine subsectors, representing 56.2 per cent of retail trade. In volume terms, retail sales increased 0.3 per cent.

In the third quarter, retail sales were up 0.6 per cent versus the previous quarter. In volume terms, they declined 0.5 per cent in the third quarter.

In it's mini-budget, the federal government pledged to cap future deficits against which guidepost?

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  • None. They pledged to cut the deficit to zero
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