08:48 AM EST, 12/20/2024 (MT Newswires) -- Canadian retail sales Friday posted a second consecutive 0.6% month-over-month advance in October, although the details weren't as strong as in the prior month, said CIBC.

Much of the gain in October sales was driven by prices and by increased spending in the often volatile auto sector, noted the bank. Excluding auto, sales rose by a more muted 0.1% month over month following an upwardly revised 1.1% surge in the prior month)+, while total sales were flat in volume terms.

Gains in furniture & electronic stores were offset by declines in building materials & supplies and food & beverage.

The advance estimate for November pointed to no change in sales relative to the prior month. However, the announcement by the federal government in late November of a GST holiday beginning mid-December may have encouraged some households to defer purchases and as such could have dampened November retail sales slightly, stated CIBC.

The bank will need to see the December data to get a full view of holiday spending.

Even though the latest release wasn't as strong as the prior one, consumer spending has still clearly improved relative to the trend seen earlier in the year, added CIBC. However, that fact is to be welcomed and not feared from an inflation point of view.

Evidence of bloated inventory levels in the retail sector during the first half of the year showed plenty of room for spending to accelerate without necessarily resulting in upward pressure on prices., according to the bank