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File photo of a potential new car buyer in Toronto.J.P. MOCZULSKI/The Globe and Mail

Canadian retail sales rose to a record in May with gains across most categories led by new automobile dealerships.

Sales increased 1 per cent from the prior month to $43-billion, Statistics Canada said Thursday in Ottawa. The rise exceeded all 18 forecasts in a Bloomberg News economist survey with a median of 0.6 per cent.

Consumer spending remains the key driver of the world's 11th economy, where lower energy prices have derailed exports and business investment. The Bank of Canada cut interest rates for the second time this year on July 15 after signs output shrank in the first half.

Sales rose in nine of 11 major categories representing 92 per cent of total receipts. After adjusting for price changes the volume of sales rose 0.4 per cent.

New car sales rose for a fourth straight month, increasing 2 per cent to $8.6-billion. Sales of used cars dropped 1.2 per cent.

Gasoline stations reported a 1.9 per cent increase in sales. Electronic and appliance store receipts rose 6.1 per cent and at building material and garden supply stores they gained 1.9 per cent.

In a separate report, the agency reported a 10.4 per cent increase in the number of jobless benefits beneficiaries in Alberta, another sign of the damage from last year's plunge in crude oil prices. Nationwide, beneficiaries increased 0.9 per cent. Unemployment insurance recipients in the western province have increased for seven consecutive months and have climbed by 61.3 per cent since May 2014.

The Bank of Canada reduced its 2015 gross domestic product forecast by almost half to 1.1 per cent last week, and cut its key interest rate to 0.5 per cent, the second downward move this year. It blamed the weakness on damage from an oil-price shock and the "puzzling" lack of a rebound in non-energy exports.

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