(Bloomberg) -- Gains for Canadian retailers slowed sharply in July and August, suggesting pent-up demand from prior months has been largely extinguished.
Sales grew 0.6% in July, versus 23% in June and 21% in May, Statistics Canada said Friday in Ottawa. Excluding vehicles, receipts unexpectedly dropped 0.4%, versus a forecast gain of 0.5%. Preliminary estimates from the agency show receipts climbed 1.1% in August, suggesting the weaker trend will continue.
The report reinforces warnings that the pace of the recovery will slow in the second half of the year, after a strong V-shaped rebound through the early summer.
“All in all, the numbers imply that retail activity is normalizing after the whipsaw of a huge downturn and recovery,” said Scotiabank economist Brett House in a note.
Core retail sales, or those excluding vehicles and gasoline, dropped 1.2%.