Canadian Retail Sales Unexpectedly Improves For Consecutive Month

Canadian retail sales unexpectedly rose in February by 0.2% against expectations of -0.3% led by increases in purchases of building supplies, gasoline receipts and food & beverages. Home-supply store sales led the way with a 3.0% gain followed by gasoline station which saw sales jump 1.7%. The improvement marks the second straight month of increased consumption which is surprising since the economy continues to lose jobs. Unemployment has reached a seven year high 8.0% and the loss of income by Canadians will eventually curb their spending habits and weigh on domestic growth. The Bank of Canada said on April 21st following its 25 bps rate cut, that they expect the economy to shrink by 3.0% this year which has raised speculation that they might initiate quantitative easing measures. The central bank is expected to outline its course of action now that it has locked in the bottom in interest rates today at 14:30 GMT, when it releases its monetary policy report.