08:09 AM EST, 11/22/2024 (MT Newswires) -- Canadian retail sales are due out at 8:30 a.m. ET Friday and were previously guided by Statistics Canada to have risen by 0.5% month over month in September, but revision risk is often high given the partial sampling of the initial flash, said Scotiabank.

Markets will also get a first estimate for October when auto sales were strong, noted the bank. These will be the last pieces of the puzzle for next Friday's round of gross domestic product.

There is too much negativity toward the Canadian consumer, stated Scotiabank. Real spending was up by 3.3% quarter-over-quarter seasonally adjusted annual rate (SAAR) in Q4 2023, 3.8% in Q1, slowed to 0.6% in Q2. Investors will find out Q3 next Friday, but retail sales volumes are tracking a rise of about 3.5% quarter-over-quarter SAAR in Q3.

Soaring auto sales have been playing a big part in that, pointed out the bank. Home sales have been rising sharply for several months including the large 7.7% month-over-month seasonally adjusted nonannualized jump last month.

Some indicators of service sector activity are buoyant, such as air travel which is tracking much higher than pre-pandemic levels for this time of the year. Some companies/industries are faring less well than others in this environment, so take the totality of the evidence all together.

Going forward, the bank thinks the amount of stimulus through regulatory and fiscal easing that is being thrown at the Canadian consumer on top of rate cuts will paint a better picture into 2025 and potentially an explosive spring environment. It recalled that easier mortgage finance rules kick in on Dec. 15, one day after the planned GST/HST cuts.

Ontario is handing out C$3 billion to residents in January through provincial handouts. The federal government's handouts equal to C$4.5 billion in April, added Scotiabank. C$2.5 billion of Federal carbon rebates are going out to small businesses in December.

All of which rests against the backdrop of pent-up savings, pent-up demand, and the lagging effects of immigration on demand, according to the bank.