08:48 AM EDT, 09/20/2024 (MT Newswires) -- Canadian retail sales started Q3 on solid footing, with a rebound in auto sales following software issues in the prior month that held back purchases driving a 0.9% month-over-month increase in total retail sales, said CIBC.

Friday's figure was three ticks above the consensus and advance estimate, and looked even better in volume terms, with a 1.0% month-over-month rise, stated the bank.

The strength was relatively broad-based, as seven of nine subsectors recorded gains. Excluding the boost from autos, sales were up by 0.4% month over month, a tick better than expected, and the advance estimate for August sales showed a 0.5% month-over-month increase, extending the good news.

However, on a per-capita basis, these figures still look "weak," with real per-capita sales 1.3% below year-ago levels, and the further deterioration in the labor market portending weaker discretionary consumption ahead, noted CIBC.

The upside surprise in the July headline versus the July advance estimate adds upside to gross domestic product for that month, in line with the earlier released wholesale data, with GDP for July likely to show a slight increase rather than the stall suggested by the advance estimate, added the bank.