Retail sales inched up in April from sales gains at car dealers, but likely dropped in May

Retail sales rose 0.3 per cent to $70.1 billion in April, helped by gains in sales at new and used car dealers, according to Statistics Canada.

For April, six of nine sub-sectors were up, as sales at motor vehicle and parts dealers gained 1.9 per cent, boosted by a 2.9 per cent increase at new car dealers and a 2.1 per cent rise at used car dealers.

"Canadian consumers continued to spend in April, but a decline in the May advance estimate for retail sales provides another indication that the economy is heading for a stall in [the second quarter]," wrote CIBC economist Andrew Grantham.

"Auto sales were once again the main driver of growth, with the near two per cent increase possibly reflecting some efforts by households to make purchases ahead of feared tariff-led price increases," he added.

However, the agency says its preliminary figures for May point to a drop of 1.1 per cent for that month, some of which could reflect a pullback in sales "similar to that seen in the U.S. following a couple of months of above-trend purchases," Grantham wrote.

Sales at sporting goods, hobby, musical instrument, book and miscellaneous retailers rose one per cent, while furniture, home furnishings, electronics and appliances retailers gained 0.8 per cent.

Sales at clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers fell 2.2 per cent.

Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, gained 0.1 per cent in April.

In volume terms, overall retail sales rose 0.5 per cent in April.