{"id":60049,"date":"2025-05-23T17:04:21","date_gmt":"2025-05-23T17:04:21","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2025\/05\/23\/retail-sales-put-a-june-bank-of-canada-rate-cut-back-on-the-table\/"},"modified":"2025-05-23T17:04:21","modified_gmt":"2025-05-23T17:04:21","slug":"retail-sales-put-a-june-bank-of-canada-rate-cut-back-on-the-table","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2025\/05\/23\/retail-sales-put-a-june-bank-of-canada-rate-cut-back-on-the-table\/","title":{"rendered":"Retail sales put a June Bank of Canada rate cut back on the table"},"content":{"rendered":"<p> \n<br \/><br \/>\n<iframe loading=\"lazy\" title=\"Bank of Canada could cut three more times: Desjardins\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/2cexjouu8vQ?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><br \/>\n<\/iframe><\/p>\n<p> Despite <\/p>\n<p>                Canadian retail sales<\/p>\n<p>                 rising 0.8 per cent in March from February, a <\/p>\n<p>                Bank of Canada<br \/>\nrate cut<\/p>\n<p>                 is back in play, says one Bay Street economist. <\/p>\n<p> The increase in March was just shy of the estimate of 0.7 per cent, but was mostly due to a 4.8 per cent rise in <\/p>\n<p>                auto sales<\/p>\n<p>                , according to Statistics Canada data released on Friday. <\/p>\n<p> The agency also estimated that <\/p>\n<p>                retail sales<\/p>\n<p>                 for April will grow 0.5 per cent month over month. <\/p>\n<p> \u201cWhat was key was the woeful 0.7 per cent plunge in the ex-auto segment. That was the steepest slide since May of last year,\u201d David Rosenberg, founder of Rosenberg Research &#038; Associates Inc., said in a note. <\/p>\n<p> That segment, which excludes automobiles, was pulled down by a 6.5 per cent plunge in gasoline sales as prices and volumes fell. <\/p>\n<p> Excluding vehicle sales \u2014 which economists said rose due to buyers trying to get ahead of retaliatory auto tariffs \u2014 and gas sales, retail sales were up 0.2 per cent month over month. <\/p>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/05\/retail-sales-march-2025.png\" title=\"\" \/><\/p>\n<p> \u201cAll of a sudden, the Bank of Canada is back in play,\u201d Rosenberg said, referring to policymakers\u2019 next interest rate announcement on June 4. <\/p>\n<p> Markets reduced their bets on a Bank of Canada rate cut earlier this week after <\/p>\n<p>                core inflation<\/p>\n<p>                 came in hotter than expected. Headline inflation slowed in April mainly due to a drop in gasoline prices after the consumer carbon tax was eliminated, but the central bank\u2019s preferred measures of core inflation accelerated. <\/p>\n<p> Currently, markets predict there is less than a 30 per cent chance the central bank will cut rates next month. <\/p>\n<p> But Rosenberg said the retail data, along with other measures that came out this week, shows that \u201cthe hot (consumer price index) number \u2014 which was mostly due to food price increases \u2014 was actually more lukewarm than it seemed on the surface.\u201d <\/p>\n<p> The other measures he is referring to include retail price deflation, which fell 0.1 per cent month over month, and \u201cdeflated\u201d producer price data in April. <\/p>\n<p> Plummeting business and consumer sentiment had set the stage for retail sales to come in weaker, according to the most recent Bank of Canada surveys. <\/p>\n<p><iframe src=\"https:\/\/flo.uri.sh\/visualisation\/22097836\/embed\"><\/iframe><\/p>\n<p> But many still believe the better-than-expected showing in March and the strength of the April estimate are due to pre-spending ahead of <\/p>\n<p>                tariffs taking their toll<\/p>\n<p>                . <\/p>\n<p> \u201cThe strength in retail sales is likely the result of consumers bringing forward some of their purchases ahead of potentially higher prices due to the trade tensions,\u201d Charles St-Arnaud, chief economist at credit union Alberta Central, said in a note. <\/p>\n<p> He said retail sales per person adjusted for inflation grew 0.3 per cent in March, while core sales were flat. <\/p>\n<p> St-Arnaud also said retail sales per person were weaker in provinces such as Ontario and British Columbia, where consumer debt and insolvencies are higher. <\/p>\n<p> While spending appears to be holding up better than expected, he thinks that policymakers will see that as \u201ctemporary\u201d and \u201c<\/p>\n<p>                <span data-olk-copy-source=\"MessageBody\">unlikely to change the Bank of Canada\u2019s view of the economy ahead of the June meeting.\u201d<\/span> <\/p>\n<ul class=\"related_links\">\n<li>Bank of Canada faces dilemma as core inflation heats up<\/li>\n<li>&#8216;Grim&#8217; retail sales underbelly points to Bank of Canada restarting rate cuts, economists say<\/li>\n<\/ul>\n<p> Instead, St-Arnaud said they will be focused on the slowdown in the labour market and trying to manage inflationary and deflationary pressures. <\/p>\n<p> \u201cWhether the (Bank of Canada) cuts at the June meeting remains a close call, but a cut seems slightly more likely,\u201d he said. <\/p>\n<p> <em>\u2022 Email: gmvsuhanic@postmedia.com <\/em> <\/p>\n<p> <em><strong>Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here.<\/em> <\/p>\n\n<br \/>Retail sales put a June Bank of Canada rate cut back on the table<\/a><br \/>\n<br \/>2025-05-23 17:04:21<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Despite Canadian retail sales rising 0.8 per cent in March from February, a Bank of Canada rate cut is back in play, says one Bay Street economist. The increase in&#8230;<\/p>\n","protected":false},"author":2,"featured_media":60050,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-60049","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/60049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=60049"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/60049\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/60050"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=60049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=60049"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=60049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}