Canadian consumers still ‘doing their job’ amid weak economy

ABOVE WATCH: The price of oil continues to tumble and that means our loonie continues to fall as well. That has a lot of economic analysts saying Canadians can soon expect to pay more for all kinds of retails items. Global’s Jenna Freeman reports.

Retail spending rose 1.0 per cent in May to $43 billion, Statistics Canada said Thursday, the third increase in four months.

Sales were up in nine of 11 subsectors, the federal agency said. In volume terms, which strips out the impact of price hikes, sales were up 0.4 per cent.

The numbers are better than expected and suggest consumers continue spend more even amid a deteriorating economic outlook.

“The consumer is still doing its job,” Doug Porter, chief economist at Bank of Montreal said.

Sales at motor vehicle and parts dealer sales rose 1.3 per cent, boosted by a 2.0 per cent increase at new car dealers. Used car dealers reported a 1.2 per cent drop in sales. Sales at gasoline stations increased 1.9 per cent amid a rebound in gasoline prices.

Regional breakdown

Retail sales were up in nine provinces in May with Ontario, Nova Scotia and, to a lesser extent, British Columbia accounting for most of the increase.

In Alberta, total month-to-month sales climbed 0.4 per cent as a result of higher sales at electronics and appliance stores and supermarkets and other grocery stores.

Saskatchewan was the lone province to post weaker sales in May, edging down 0.1 per cent.

Economic outlook

The numbers come as the economy shows signs it may have entered recession in the first half of the year, as oil prices fell while other parts of the economy, namely manufacturing and exporters, failed to pick up the slack.

Policymakers and economy watchers are holding out hope that a weaker dollar will spur a bounce back in those sectors in the second half of the year.

“Now the economy needs some serious help from non-resource exports,” Porter said.