Canada August retail sales rise 1.2%

By Promit Mukherjee

OTTAWA, Oct ‌23 (Reuters) - Canadian ​retail ​sales rose 1.2% in August from July to C$74.57 billion ($53.2 billion), slightly less than expected, ‌and were led by higher sales at motor vehicle ⁠and parts dealers, Statistics Canada said on Friday.

The higher sales reversed ‌the previous month's drop ‌of 0.7%.

Retail sales, which include purchases of cars, furniture, food and gasoline, are considered an early indicator of ​gross domestic product growth and account for about 40% of consumer spending.

• Sales likely increased 0.7% in ⁠September, the agency said in a flash estimate.

• In August, sales were up ​in all nine subsectors. In volume terms, retail sales increased 1.2%.

• This is the last major data ​before the Bank of Canada's ‌monetary policy decision next week where money markets are pricing in a rate hike of ⁠25 basis points. However, economists are divided on whether the BoC will hike or hold.

• Core retail sales, which exclude ⁠gasoline stations and fuel vendors and motor vehicle and parts dealers, were ​up 1.1% in August, StatsCan said.

• Sales at motor vehicle and parts dealers, which contribute more than a quarter of total ‌retail sales, increased by 1.2%, thereby contributing the most to the gain in retail sales ‌in August.

• Purchases at food and beverage retailers, the ⁠second-biggest category, were up by ‌1.1% in August ​after a decline in July, data showed.

(Reporting by Promit Mukherjee and Dale Smith; Editing by Toby ‌Chopra)

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