**Canada’s retail sales edged up 0.6% in June, boosted by a rebound in auto sales, but the underlying trend remains weak, raising concerns about the health of the economy.**.
According to Statistics Canada, retail sales rose to C$63.4 billion in June, following a revised 2.2% decline in May. Sales of motor vehicles and parts led the increase, rising 6.9%..
Excluding autos, retail sales were up a more modest 0.1%. Core retail sales, which exclude gasoline, were also up 0.1%..
The increase in retail sales was below economists’ expectations, who had forecast a 1.8% increase. The weak sales growth follows a period of strong gains earlier in the year, fueled by pent-up demand from the pandemic..
**Economists say the latest data suggests that the Canadian economy is losing momentum.** The Bank of Canada has already raised interest rates four times this year, and is expected to hike rates again next month. Higher interest rates make it more expensive for businesses and consumers to borrow money, which can slow economic growth..
**The Bank of Canada has warned that the economy is facing a number of challenges, including rising inflation, geopolitical uncertainty, and the ongoing COVID-19 pandemic.** The central bank has said that it is prepared to take further action to bring inflation back to its 2% target..
**The weak retail sales data is likely to add to concerns about the health of the Canadian economy.** Consumers are facing rising prices for food, gas, and other essential items. This is eating into their disposable income, leaving them with less money to spend on discretionary items..
**Businesses are also facing challenges.** Higher interest rates are making it more expensive to borrow money, and supply chain disruptions are pushing up the cost of goods. This is squeezing businesses’ profit margins and making it harder for them to invest and grow..
**The Canadian economy is at a crossroads.** The Bank of Canada is trying to bring inflation back under control without derailing the economic recovery. The government is also trying to support businesses and consumers through a variety of measures, including tax cuts and spending programs..
**But the latest retail sales data suggests that the economy is facing headwinds.** The Bank of Canada is likely to continue to raise interest rates, which could further slow economic growth. Consumers are also likely to remain cautious about spending, as they grapple with rising prices..
**The Canadian economy is facing a challenging period.** The government and the Bank of Canada will need to work together to navigate these challenges and ensure that the economic recovery continues..
