Statistics Canada (StatsCan) reported Canadian retail sales increased in August, offsetting the decline in July. Retail sales growth has been choppy over the last few months. Canadian consumers have at times shown their resiliency, despite falling consumer confidence amid trade tensions with the US, which has raised concerns about the outlook for Canada’s economy. StatsCan estimated another decline in September. Here’s more from StatsCan’s retail sales report.

• Retail sales increased by 1.0% in August over the previous month, which matched expectations, based on a Bloomberg survey. August’s increase was a rebound from the 0.7% decline in July. Sales have been up one month and down the other since April.
• Sales at motor vehicle and parts dealers increased by 1.8% in August, a key contributor to overall monthly growth. Sales of clothing and building materials also increased. Conversely, sales declined at gasoline stations.
• Looking ahead, StatsCan estimates that retail sales fell by 0.7% in September. September’s decline could point to modest consumer spending over the third quarter of 2025, which could weigh on economic growth.
• Canadian households could get some added support from the Bank of Canada, which is expected to cut interest rates again this year, possibly as early as next week.

Data points to soft spending over the quarter as trade tensions weigh on economic conditions, including the labour market. Canada may be nearing a sectoral trade agreement with the US, which might help boost confidence, the labour market and economic activity. In an address on Tuesday, Prime Minister Mark Carney said his government is pledging generational investments in his upcoming budget to transform the Canadian economy for the future.

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