More Impressed Users! Canadian Retail Sales Still Falling

<p>&nbsp;Canadian consumers appear to be cutting back on their spending as higher interest rates from the Bank of Canada begin to impact broader household budgets.</p><p><br /></p><p>Retail trade income fell 0.3% in August, the first decline since March, based on preliminary estimates from Statistics Canada released on Friday. This follows an increase of 0.3% in the previous month, which missed the median estimate of 0.4%.</p><p><br /></p><p><br /></p><p>Sales rose in seven of the nine subsectors in July, driven by increases in food and beverage retailers. Auto and parts dealers showed the biggest declines for the month, and declined for the first time in four months. Excluding those factors, retail sales rose by 1%, double expectations.</p><p><br /></p><p>The report shows that Canadians are tightening their spending as more households face home loan repayments and high oil prices. The Bank of Canada kept borrowing costs on hold on Sept. 6, saying recent evidence shows higher rates are impacting the economy and consumption.</p><p><br /></p><p>The resilience in household spending at the beginning of the year prompted policymakers to continue raising interest rates in June and July. The central bank's next interest rate decision is expected to be announced on Oct. 25, and most economists expect the central bank to keep interest rates on hold again.</p>