Retail sales rose 0.6 per cent to $66.5 billion in September led by increases at motor vehicle and parts dealers, Statistics Canada said Friday.
The agency's early estimates also suggest retail sales increased 0.8 per cent in October, though it cautioned the forecast would be revised.
For September, sales at motor vehicle and parts dealers rose 1.5 per cent, led by a 2.4 per cent gain in sales at new car dealers, while used car dealers saw a two per cent drop.
Core retail sales — which exclude gasoline stations, fuel vendors and motor vehicle and parts dealers — fell 0.3 per cent in September.
CIBC economist Katherine Judge said that reflected "widespread weakness across many discretionary categories."
While the overall results were "well above" predictions of a flat month for retail sales, Judge noted the 0.6 per cent rise was concentrated in auto sales and gasoline.
October's advance estimate "would likely just represent a temporary reprieve, given the climb in the unemployment rate that's being seen, along with the impact of mortgage renewals at higher interest rates," she said in a note to investors.
Sales at food and beverage retailers fell 0.4 per cent, while sales at sporting goods, hobby, musical instrument, book and miscellaneous retailers dropped 1.6 per cent.
In volume terms, overall retail sales increased 0.3 per cent in September.
TD economist Maria Solovieva said there is risk that a seasonal surge in shopping toward the end of 2023 may not be enough to reverse weak momentum from last quarter.
"Our estimates using internal card spending point to a continued slowdown in October," she said in a note.
"While Black Friday deals might attract attention, the overarching theme of this year’s holiday shopping is expected to be centred around bargain hunting, reflecting cautious consumer sentiment."
This report by The Canadian Press was first published Nov. 24, 2023.
Sammy Hudes, The Canadian Press