Business and Finance

Retail sales in Canada fell in February for the first time in five months, with Ontario experiencing the greatest decline, Statistics Canada said today.

The Canadian dollar, already weaker after yesterday’s central bank rate cut, fell further on the the news as economists speculated softer consumer spending could lead to even more rate cuts in future.

However, economists also said the country is still expected to enjoy moderate but buoyant growth this year.

Despite the greater than expected decline, economists said economic growth in Canada remains buoyant.

"While the doom-and-gloomers will jump all over this one month slide, spending is still on track for a quite healthy performance in the first quarter overall and activity is still posting very solid year-on-year increases," senior economists Doug Porter at BMO Nesbitt Burns wrote in a note to client.

"With job growth still chugging along, wages rising, interest rates falling and some modest tax relief flowing, this sales drop does not look like the start of a trend," he added.

Across Canada, sales slipped by a greater than expected 0.7 per cent to $35.5 billion from January, but were 5.3 per cent higher than a year ago, Statistis Canada said payday loans in 1 hour americashadvance.

None of the eight retail trade sectors posted gains, and two posted significant reductions, the federal agency said.

Auto sales fell 1.3 per cent from record levels, while clothing and accessories declined 1 per cent. Furniture and miscellaneous sales also fell, Statistics Canada said.

Ontario experienced the greatest decline, with sales falling 1.6 per cent, possibly due to the near record snowfall and addition of a new Family Day holiday, the agency said.

Consumers were too busy shovelling to shop, Porter suggested.

Coming on the heels of disappointing wholesale sales figures for February, the latest data point to another month of positive, if moderate, economic growth, wrote Dawn Desjardins, senior economist at RBC Financial Group.

Despite the monthly decline, and moderate sales in the middle of 2007, retail sales have been rising at a rapid clip since 2004, the agency said.

Consumer spending on goods, which accounts for half of all consumer spending, is a closely watched indicator of economic growth.

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