Consumer spending appears to be downshifting with retail sales taking another sharp dip in January, declining by 1.7 per cent to $41.4 billion.
It’s the second month in row of sharply lower sales at stores, gas stations and other retailers, with monthly sales trending down in seven of 11 categories .
Experts anticipated that monthly spending would decline a far more modest 0.5 per cent. The bigger-than-expected decline in January followed a deep 2.0 per cent drop in December.
Lower gas prices in January accounted much of the drop, as lower oil prices fed through to a decline in pump prices and receipts. Statscan, which also released its monthly consumer prices index , said gas prices in January were 26.9 per cent lower than January 2014.
But even excluding gasoline, retail sales contracted by 0.8 per cent, the federal statistical agency said. Sales of furniture slumped 2.1 per cent, Statscan data showed, while department stores saw a 1.1 per cent pullback in spending compared to January a year ago.
“Weakness was actually more broad based than expected,” CIBC economist Nick Exarhos said.