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Higher gas prices and sales at new car dealers helped lift Canadian retail sales 2.2 per cent in May to $62.2-billion, but an early estimate by Statistics Canada pointed to a slowdown in the pace of sales gains for June.

The reading for May topped the agency’s preliminary estimate for the month that had suggested a gain of 1.6 per cent, however Statistics Canada said Friday its early estimate for June pointed to growth of just 0.3 per cent.

TD Bank economist Ksenia Bushmeneva said retail sales advanced at a strong pace in May, but the details of the report were not as positive.

“Much of the gain in May is due to higher prices, particularly at the pump, and a recovery in auto sales following three months of decline,” Ms. Bushmeneva wrote in a report.

Digging deeper in the report, she said a number of categories, such as gasoline, clothing and sporting goods, actually saw sales fall in inflation-adjusted terms.

Statistics Canada said core retail sales – which exclude gasoline stations and motor vehicle and parts dealers – increased 0.6 per cent for May, while overall retail sales in volume terms rose 0.4 per cent in the month.

“With inflation running at a multi-decade high, higher prices have been giving a lift to nominal retail sales figures. As such, it’s becoming increasingly important to look at spending in real or inflation-adjusted terms,” Ms. Bushmeneva said.

Statistics Canada said the overall increase in retail sales for May came as sales rose in eight of the 11 subsectors it tracks.

A 12.0-per-cent gain in gas prices helped lift sales at gasoline stations 9.2 per cent in May, however in volume terms sales at gas stations fell 2.2 per cent.

Meanwhile, sales at motor vehicle and parts dealers rose 3.3 per cent boosted by a 3.8-per-cent gain at new car dealers, its best showing since February 2021. Sales at automotive parts, accessories and tire stores gained 5.8 per cent and other motor vehicle dealers gained 1.1 per cent, while used car dealers saw a drop of 1.6 per cent.

The gain in core retail sales was led by a 1.9-per-cent gain in sales at food and beverage stores, while sales at general merchandise stores gained 1.4 per cent.

Statistics Canada said the largest decline to core retail sales in May came from a 6.7-per-cent drop in miscellaneous store retailers which includes pet stores, cannabis stores and office supplies and stationery stores.

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