09:27 AM EDT, 10/28/2024 (MT Newswires) -- Canadian retail sales rose 0.4% month over month in August, a tad light compared with the 0.5% consensus increase view, noted Rosenberg Research after Friday's data.

However, the entire increase was in "lumpy" auto receipts, or 3.5% month over month, said Rosenberg Research. Outside of this, sales fell a "hard" 0.7% sequentially and that was a big downside miss relative to consensus expectations of 0.4% advance -- and July was also taken down a smidge to 0.3% gain from 0.4%.

Core retail sales, which exclude both autos and gasoline, dropped 0.4% in the first setback in three months and have slowed markedly to near-flat on a year-over-year basis, from a 1.5% rise a year ago and 6.9% two years ago.

There is no doubt that Canada is experiencing a severe growth turndown, pointed out Rosenberg.

In real terms, retail sales spiked 0.7% month over month and that came on the heels of a 0.8% rebound in July. Give credit to the price cuts taking hold in the broad retail sector, because the price deflator fell 0.3% month over month after a flat June-July period -- leaving the year-over-year trend at -0.2% from +0.5% this time last year and a massive deceleration from the +7.8% pace in August 2022.

A development that has undoubtedly caught the Bank of Canada's eye -- something tells Rosenberg that the country hasn't seen the last 50 basis point rate cut.