Retail Sales in Canada Plunged During Third Wave of Covid-19
(Bloomberg) -- Canadian retail sales plunged at the start of the second quarter as the economy was hit by a third wave of Covid-19 restrictions.
Receipts fell 5.7% in April after many provinces introduced strict measures to curb virus cases, Statistics Canada said Wednesday. Sales fell further in May, down about 3.2%, according to a preliminary estimate from the agency.
The sharp decline in those two months erased much of the gains recorded earlier this year, when sales had rebounded sharply to new records.
Receipts in May, however, were about 22% above year-ago levels, according to Bloomberg calculations. Sales in May were also 2% above pre-pandemic levels in February 2020.
The weak retail sales numbers mirror a decline in jobs during those two months, with employment falling by 275,100. The extent of the weakness may be more than the Bank of Canada has been anticipating, according to Royce Mendes, an economist at Canadian Imperial Bank of Commerce. The central bank in April projected the economy will continue growing in the second quarter by an annualized 3.5%.
“These results continue to suggest that the Bank of Canada is too optimistic on the growth outlook for the second quarter,” Mendes said in a report to investors.
Despite the setback, analysts expect a quick rebound for the economy in June as containment measures are gradually lifted.
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