08:46 AM EDT, 10/25/2024 (MT Newswires) -- While Canadian retail sales Friday posted a further "solid" headline gain in August, the advance was largely driven by often volatile auto sales and core measures looked much less impressive, said CIBC.

The 0.4% month-over-month headline gain was close to the consensus forecast of 0.5%, and followed a 0.9% advance in the prior month. However, August sales were flattered by a 3.5% gain in autos, and excluding that category sales actually fell by 0.7% while consensus was for a 0.4% rise, noted the bank.

Core retail sales, which excludes autos and gasoline, fell by 0.4% month over month which marked the first decline in three months on that breakdown. Food & beverage, furniture and electronics stores saw declines in the month.

Total sales were up by 0.7% in volume terms and advance information for September suggested a headline nominal gain of 0.4% month over month.

Overall, Friday's report suggests that consumer spending remains "patchy" and that further reductions in interest rates will likely be needed to bring a sustained acceleration, according to CIBC.