Canadian retail sales rose for the fourth straight month, the longest growth streak since early 2022, signalling the central bank’s interest-rate cuts are boosting consumer spending.

An advanced estimate suggests receipts for retailers jumped 0.7% in October, the strongest pace since July, following a 0.4% gain in September, Statistics Canada said on Friday.

With September’s increase, which matched expectations in a Bloomberg survey, third-quarter retail sales were up 0.9%. That’s compared with the first half of the year, which posted the largest contraction since 2009 outside the pandemic.

The Bank of Canada ramped up its pace of rate cuts in October with a 50 basis-point reduction to strengthen economic activities. Although last month’s inflation reacceleration lowers the odds of another jumbo cut in December, policymakers are expected to continue cutting gradually to make borrowing costs less restrictive.

Prime Minister Justin Trudeau’s government on Thursday announced plans to waive federal sales taxes from items including prepared foods, some alcohol, books and toys over the winter holidays, as well as hand out a one-time cheque of C$250 to nearly 19 million Canadians in the spring. The stimulus package is expected to further fuel consumption in the fourth quarter (4Q) and into next year.

In September, sales were up in six of nine subsectors, led by increases at food and beverage retailers as well as building material and garden suppliers. The largest decrease was recorded at gas stations, which posted a fifth straight monthly drop. That was driven by lower gas prices that month, as volumes increased 3.2% in the sector. Sales at car dealers were also down.

Core retail sales, which exclude gas stations and car dealers, surged 1.4%. In volume terms, receipts increased 0.8%. Excluding autos, sales were up 0.9%, which beat economist expectations of 0.4% and is the fastest growth rate since April.

Regionally, sales were up in five of 10 provinces, with Alberta seeing the largest increase of 2.3%, led by higher receipts at car dealers.

The statistics agency didn’t provide details on the October estimate, which was based on responses from 58.9% of companies surveyed. The average final response rate for the survey over the previous 12 months was 88.9%.

  - Bloomberg