Rising gasoline prices drive up nominal retail sales but sales volumes show only a slight increase; Canadian consumer resilience supports economic rebound, growth momentum continues in the second quarter, but significant challenges remain for the second half of the year.

Rising gasoline prices drive up nominal retail sales but sales volumes show only a slight increase; Canadian consumer resilience supports economic rebound, growth momentum continues in the second quarter, but significant challenges remain for the second half of the year.

智通财经2026/07/23 15:41

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Canada’s retail sales in May rose by 1.0% month-on-month to 73.71 billion Canadian dollars, marking an increase for the fifth consecutive month and matching market expectations. Core retail sales, which exclude automobiles and gasoline, climbed 0.9%, fully recovering from a 0.7% decline in this category in April.
Retail sales by volume edged up only 0.3%. Economists pay closer attention to this metric to assess real economic activity. The divergence between nominal and volume growth rates highlights the distorting impact of rising energy prices on the data — the nominal increase for gasoline stations and fuel suppliers reached 3.1%, while actual sales volume declined by 2.7%.
All nine retail categories tracked by the statistics bureau reported nominal growth. The sporting goods and miscellaneous sector contributed significantly with a 1.8% increase for the month. Preliminary estimates for June suggest total retail sales will grow by 0.4%, indicating a slower pace compared to May.
Household spending is becoming an unexpected driver of Canada’s economic growth. The central bank expects consumption to be the main growth engine by 2026, offsetting weakness in housing, business investment, and net trade. Retail sales have rebounded 5.2% from their September low last year and are up nearly 3% since the start of this year.
BMO Capital Markets economists pointed out that even excluding the impact of rising gasoline prices, May’s data remained solid. The preliminary June figures also show positive momentum. The economy is gaining steam in the second quarter, but faces several challenges in the second half of the year, including tariff threats, extreme weather, and energy price shocks. Whether consumer spending resilience will persist remains to be seen.

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Rising gasoline prices drive up nominal retail sales but sales volumes show only a slight increase; Canadian consumer resilience supports economic rebound, growth momentum continues in the second quarter, but significant challenges remain for the second half of the year.

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