Statistics Canada reports retail sales up 0.8% in March at $69.8 billion
Retail sales rose 0.8% to $69.8 billion in March, helped by an increase in new car sales as Canadians looked to get behind a new set of wheels before tariffs started to raise prices.
The gain came as Statistics Canada's preliminary estimate for April also pointed to an increase of 0.5% for that month, though the agency cautioned the figure would be revised.
TD Bank economist Marc Ercolao said the March retail sales data came in a bit warmer than expected.
"Consumers pulled forward their auto purchases, something we expected as buyers front-ran counter tariffs imposed in April," Ercolao wrote in a report.
However, Ercolao noted it wasn't just autos that moved higher.
"The surprise was in the five of seven non-auto retail components that advanced on the month, which may represent stockpiling of non-discretionary items ahead of other incoming tariffs," he said.
Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—rose 0.2% in March.
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Overall, Statistics Canada said retail sales in March were up in six of nine subsectors it tracks as sales at motor vehicle and parts dealers gained 4.8%.
The increase for motor vehicle and parts dealers was the first move higher in three months for the subsector as sales at new car dealers rose 5.2% and used car dealers gained 2%.
Sales at building material and garden equipment and supplies dealers rose 2.6%, while clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers also gained 2.6%.
In volume terms, overall retail sales increased 0.9% for the month.
BMO senior economist Shelly Kaushik said looking through the tariff- and energy-price-driven swings, it was still a decent retail sales report for March.
"The flash estimate points to some firmness in April, but the longer the trade war goes on, the more it will weigh on sentiment and spending," Kaushik wrote in a report.
The retail sales data comes ahead of Statistics Canada's reading for gross domestic product for March and the first quarter as a whole on May 30.
The Bank of Canada's next interest rate decision is set for June 4.
