MNI: Canada Retail Sales Rebound in March Even As Tariffs Hit

Canadian retail sales grew for the first time in three months in March even as U.S. trade threats escalated and a domestic sales tax holiday ended.

Statistics Canada's flash estimate for March climbed 0.7%, following the official February reading of a 0.4% decline. Sales had declined 0.6% in January and risen 2.5% in December. 

Even the February decline masked some potential underlying strength as "core" sales excluding autos and gasoline rose 0.5%. The overall decline was led by a 3% fall in new car sales, and furniture and electronics were down 2.9%. Gasoline sales rose a fifth consecutive month February.

Sales have also climbed 4.7% in February from a year earlier, perhaps reflecting Bank of Canada interest-rate cuts that began in June. The BOC's April Monetary Report said consumption and business spending likely weakened in the first quarter due to economic uncertainty and tariffs. 

The BOC earlier this month held its key interest rate at 2.75% after seven straight cuts and it said it will take a cautious stance, weighing risks to both growth and inflation from the trade outlook.  

Separately, factory sales in March fell 1.9%, according to StatsCan's flash estimate. The fall was led by petroleum, coal, metal and transportation equipment sub-sectors.