09:16 AM EST, 02/24/2025 (MT Newswires) -- Canada celebrated a "whopper" of a retail sales report on Friday, said Rosenberg Research.

Retail sales activity came in at +2.5% month over month while consensus was for 1.6% in December following a 0.2% month-over-month uptick in November, which was revised up from flat. The excluing auto segment popped 2.7% month over month while consensus was for 2.0%, and that more than erased the 0.7% pullback in the prior month.

The case continues to build for the Bank of Canada to pause and assess at the next policy meeting on March 12, stated Rosenberg Research.

The headline sales gain was the strongest since May 2022 and extended the winning streak to six months -- the longest in nearly three years. The year-over-year trend doubled to 4.0% -- the best since January 2023 -- and has finally caught up to the sales pace of the United States. The sales tax holiday has certainly been providing a boost -- the question will then become how much of this consumer growth was borrowed from the future -- the GST/HST tax break began in mid-December and just ended last week, pointed out Rosenberg.

The December gain was breathtaking in its breadth: gasoline stations (+4.2%), grocery chains (+3.5%), general merchandisers (+3.2%), apparel (+3.1%), online sales (+3.1%), building materials (+2.4%), sporting goods (+2.2%), autos (+1.9%), and pharmacies (+0.9%). Pot smoking and gummies have become a staple, not just a pastime, as cannabis stores rang in a 2.8% month-over-month surge after a 3.5% run-up in November. Tack on the 3.9% pop in beer/wine/liquor sales, and you can see how Canadians are coping with the US. President Donald Trump's tirade on tariffs -- "numbing themselves," added Rosenberg.

While Statistics Canada is penning in a 0.4% month-over-month giveback for January, this would only offset one-sixth of the December spike in sales.

In real -- volume -- terms, sales rose a solid 2.5% so this was more about traffic than about pricing and soared at a 7.8% annual rate in Q4 -- compounded off a 4.5% rebound in Q3. Even with the StatsCan estimate for January, assuming that modest giveback, Rosenberg still would have a 4.2% gain "build in" for the current quarter.