This indeed is refreshing news for Canada. Coming as it does when the Coronavirus has cast a widespread gloom across the globe, this one gives a sense of encouragement. Retail sales in Canada rose 0.6 per cent over a month earlier in July 2020 to $52.9 billion, following a downwardly revised record 22.7 per cent gain in the previous month but below market expectations of a 1 per cent increase.
The rise is led by higher sales at motor vehicle and parts dealers and gasoline stations.
Core retail sales, which exclude the aforementioned two sub-sectors, declined 1.2% on lower sales at building material and garden equipment and supplies dealers as well as a food and beverage stores.
As noted in the National balance sheet and financial flow accounts, second-quarter 2020, the period of depressed retail sales in the second quarter of 2020 coincided with a 13.7% decline in household spending (nominal terms) and an increase in the household savings rate to 28.2% as physical distancing measures left Canadians with fewer places to spend. However, with the gradual resumption of business activities across the country, retail sales in June and July, respectively, were able to recover and surpass February's pre-pandemic levels.
Retail sales in volume terms were up 0.4% in July.
Statistics Canada, in the meanwhile, has provided an early estimate of retail sales in August. It shows a gain of 1.1% gain. Is it a V-shaped recovery? For, sales in June and July have not only rebounded but also surpassed February's pre-pandemic levels.
Wholesale sales grew for a third consecutive month in July as sales rose 4.3% to a record-high $65.0 billion on the strength of higher sales in the motor vehicle and motor vehicle parts and accessories sub-sector.
The wholesale sector has demonstrated considerable resiliency as the Canadian economy started to reopen in the midst of the COVID-19 pandemic. July's sales were 0.6% higher than the pre-Covid level in February 2020.
The recovery from the COVID-19-induced drop has been widespread in the wholesale sector, as most sub-sectors' sales have reached pre-pandemic levels. Five of the seven sub-sectors reported sales in July that were higher than in February.