The National Bank of Canada says consumer spending was exceptionally good in May

Canada on Friday released data analysis showing retail sales exceeded the target in May. Sales edged up 2.2%, against forecasts of a 1.6% increase. The increase in sales was driven by strength in the job market, according to National Bank of Canada professional analysts. This will be offset by rising interest rates and prices.

According to the report, this positive sales trend was observed for the fifth consecutive month. Core retail sales were 0.6% higher than expected. Additionally, all provinces recorded similar sales results, making the distribution of retail sales brighter across the country.

“The May report was mainly supported by auto dealers and gas stations. Despite a slight decline in last month’s review, consumer trends have been exceptionally good this month,” said concerned analysts.

The official added: “Expenditure in other sectors is falling due to increase in interest and expenses.” We believe these industries will be able to offset rising prices by strengthening the labor market and increasing savings rates.

Statistics Canada estimated an increase of 0.3% in June, up from 0.4%, showing an optimistic estimate for the coming months. From April to June this year, retail spending grew by 2.1% year-on-year, including last month’s increase in sales. Growth was expected to be flat in June, but the results were more positive than expected.