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Retail sales flatlined in the second quarter while sales volume dropped 0.8 per cent, Statistics Canada said on Aug. 23, signs that economic activity is weakening as the Bank of Canada’s rate hikes take a deeper hold.
Sales increased 0.1 per cent to $65.9 million in June, led by spending at auto and parts dealers, which grew 2.5 per cent. Excluding those sales and those at gas stations, core retail sales decreased 0.9 per cent in June and 0.2 per cent in volume terms.
Policymakers will be scrutinizing retail data for signs of excess demand when they meet for the Sept. 6 interest rate decision. The Bank of Canada has raised interest rates 10 times since early 2022 to bring supply and demand back in balance, but a resurgence in inflation in July has added a layer of uncertainty to the central bank’s next move.
Still, economists are calling for another pause in September as unemployment has increased by half a percentage point since April to 5.5 per cent in July, suggesting people’s spending power is dwindling, although Statistics Canada’s advance estimate of retail sales for July shows a 0.4 per cent increase.
The Canadian Chamber of Commerce tracks its own set of consumer spending data and July’s figures show that nominal spending was up more than two per cent on an annual basis.
Chief economist Stephen Tapp said the chamber’s numbers shows that strong population growth fuelled by immigration and higher inflation have kept the economy chugging along. But high-frequency data shows that consumer spending pulled back by mid-June and into July, as people began to feel squeezed by interest rates, which are now at five per cent.
Tapp advised businesses to keep an eye on costs as sales are likely to come under pressure if the economy continues to slow.
“However, by demonstrating more resilience, (consumers will) pay the price of higher cost of future borrowing (and spending),” she said, adding that mortgages and their renewals will eat into discretionary budgets. “This means that retail sales could be the next in line to roll over.”
• Email: bbharti@postmedia.com
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Health Canada has given its stamp of approval to Pfizer-BioNTech Comirnaty’s new COVID-19 vaccine that targets the Omicron XBB.1.5 subvariant.
The health department says it received Pfizer-BioNTech’s submission on June 29, 2023 and decided to authorize the shot’s use for individuals aged six months and older after “a thorough and independent review of the evidence.”
Health Canada says the vaccine is authorized as a one-dose vaccine for individuals five years of age and older, regardless of their COVID-19 vaccination history.
Infants and children between six months and less than five years of age, who have not previously received a complete COVID-19 primary series, should receive three doses. If they have completed a primary series, officials say they should receive one dose.
Moderna’s COVID-19 vaccine targeting the Omicron XBB.1.5 subvariant was authorized(opens in a new tab) by Health Canada earlier this month.
The department says it’s currently reviewing a submission from Novavax for its COVID-19 vaccine targeting the Omicron XBB.1.5 subvariant for people 12 years of age and older.
The National Advisory Committee on Immunization (NACI) is anticipated to provide guidance on the rollout of the newly approved COVID-19 vaccines in the coming months.
“Canada will have ample supply of the new formulation of mRNA vaccines available in fall 2023,” Health Canada said in a news release Thursday.
“Vaccination continues to be one of the most effective ways to protect ourselves against COVID-19. Evidence indicates that vaccines approved for use in Canada are effective at preventing severe illness, hospitalization and death from COVID-19.”
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Hyundai and Kia are recalling more than 600,000 vehicles in Canada and millions more in the U.S. due to a problem with the anti-lock braking system that can start a fire.
Documents posted by U.S. safety regulators on Wednesday say the anti-lock brake control module can leak fluid and cause an electrical short. That can touch off a fire while the vehicles are parked or being driven.
Hyundai says 326,942 vehicles in Canada are impacted, including:
An additional 1,642,551 of those and other makes and models are being recalled in the U.S.
The company says it is aware of 21 fires linked to the default in the United States, as well as 22 “thermal incidents,” including visible smoke, burning and melting, but Hyundai Canada told CBC News in a statement that there are “no crashes, injuries, or fatalities attributable to this condition.”
Kia Canada says 276,225 vehicles in Canada are impacted, including:
An additional 1.7 million Kias in the U.S. are included in the recall.
In a statement, the U.S. National Highway Traffic Safety Administration said that “until these recalled vehicles have been repaired … the safest place to park them is outside and away from homes and other structures.”
It said that “fires can occur whether the vehicle is parked and turned off or while driving.”
Dealers will replace the anti-lock brake fuse at no cost to owners, but owners won’t be notified by mail until November.
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