Bank of Montreal economist Shelly Kaushik said retail spending had a surprisingly strong June, though much of the headline strength was due to higher prices as volumes were sluggish.
Retail sales in volume terms gained 0.2% in June.
“Still, it looks like retail sales will add to growth in the second quarter. However, the flash estimate for July points to a weaker start to Q3,” Kaushik wrote in a report.
For June, higher prices helped lift sales at gasoline stations 3.9% for the month even as sales at gasoline stations in volume terms fell 1.3%.
Meanwhile, sales at motor vehicle and parts dealers gained 1.8% in June, boosted by a 2.9% gain at new car dealers. Sales at used car dealers gained 1.7%.
Core retail sales — which exclude gasoline stations and motor vehicle and parts dealers — rose 0.2%.
General merchandise stores gained 1.1% for June, while clothing and clothing accessories stores rose 1.8%, helped by a 2.1% gain at clothing stores and a 2.4% increase at jewelry, luggage and leather goods stores.
Sales at food and beverage stores fell 1.1% in June as sales at supermarkets and other grocery stores dropped 0.8% and beer, wine and liquor stores lost 2.9%.