Unfortunately, they are not going to be able to do this every month.
Thanks to hefty incentives from the auto dealers, Canadian retail sales surged in November. That's great while it lasts, but it cannot last forever.
According to Statistics Canada, Canadian retail sales were up by 1.4 per cent in the month of November. That's double the 0.7-per-cent gain expected by the market. Here's the catch, though. Excluding autos, sales dipped by 0.6 per cent in November. The market had figured on 0.3-per-cent growth in the category.
The last few months have put retail spending on a roller-coaster. Sept. 11 caused sales to plunge, although they came back in October. November was the acid test, and Canadian consumers failed. With the exception of autos, and some decent results in the furniture sector, few categories showed strength.
Which actually is the story for most of 2001.
Oh, retail sales were up by a respectable 4.4 per cent year to date to November. Still, most of the gains were made early in the year. From April on, little spending was apparent.
Which means that December sales will be watched pretty carefully. Preliminary figures show us that auto sales managed a last gasp during the month. On the flip side, Canadian employment trended down and the unemployment rate rose. And even if December looks okay, the outlook for 2002 is iffy at best. Auto incentives will finally disappear, and it's not clear that any other category can replace car sales.
As if there was any shortage of things to drive the Canadian dollar down.
In case anyone missed it, last week was a miserable one for our currency. Our loonie managed to trade at some of its lowest levels ever, thanks partly to worries about Canada's economic outlook. Today's better-than-expected headline numbers may put a floor under it for a bit, but its going to take more than a one month blip in spending to put it on much of an upward trend.
Stay tuned.