08:55 AM EDT, 08/22/2025 (MT Newswires) -- Following a sharp rebound in June, Canadian retail sales appear to have slipped into reverse again in July, said CIBC after Friday's data.

The final reading for June confirmed a strong 1.5% month-over-month increase in sales, which was close to the advance estimate and consensus forecast, noted the bank.

The composition of growth was broader than expected, with excluding auto sales rising by 1.9% month over month while the consensus was for 0.8%, and core sales -- which exclude gasoline as well -- matching that increase.

Clothing sales saw a particularly strong increase on the month, while the often volatile auto sector actually saw little change, pointed out CIBC.

Overall sales volumes rose by 1.5% in June -- although that increase only offset the decline seen in the prior month -- and by 2.8% annualized over Q2 as a whole.

StatsCan's advance estimate for July, however, suggests that nominal retail sales fell by 0.8% month over month, reversing roughly half of June's increase.

Retail sales have been on a bumpy ride since the start of the year, but through the monthly volatility, sales volumes are little changed relative to where they stood in December 2024 (+0.2%), stated the bank.

This is consistent with a generally more cautious attitude among consumers to spending amid tariff uncertainty, particularly compared with the solid growth seen during the second half of 2024, and isn't the sort of consumer spending that should worry Bank of Canada policymakers from an inflation point of view as it debates whether to cut interest rates further, added CIBC.