Consumer demand wilted during the first quarter as retail spending in ÎÚÑ»´«Ã½ declined for a third consecutive month in March. Seasonally adjusted sales fell 0.2 per cent from February with real spending down 0.4 per cent.
First quarter spending declined 0.2 per cent from Q4 of 2023, although real spending nudged higher by 0.3 per cent. A notable decline was seen in furniture, home furnishings, electronics and appliances retailers, which was down 1.3 per cent. For the fourth consecutive month, lower retail sales were also reported at clothing stores, where sales fell 1.7 per cent. Meanwhile, higher retail sales were reported at motor vehicle and parts dealers, up 0.8 per cent. This is the second consecutive month of increasing sales in this category.
The weaker spending profile was more pronounced in ÎÚÑ»´«Ã½, where sales fell 0.4 per cent to a seasonally adjusted $8.9 billion following a February bump. Quarter-over-quarter sales fell 1.3 per cent in March with a consistent range-bound pattern over the past year. Year to date unadjusted retail sales were up just 0.2 per cent, totalling $24.4 billion.
Only four out of nine subsectors in ÎÚÑ»´«Ã½ recorded higher year-over-year unadjusted March retail sales. Motor vehicle and parts dealers reported a surge (up 18.9 per cent) in monthly sales to an unadjusted $2.1 billion, but they were down year-over-year. General merchandise retailers’ sales were up four per cent from March 2023.
In the Metro Vancouver area, seasonally adjusted retail sales fell 0.1 per cent in March compared to February. Year over year, monthly retail sales were up one per cent. Year-to-date sales were also up one per cent.
Preliminary national figures for April point to a bounce back in sales. However, we expect the trend will remain range-bound given financial stress caused by elevated interest rates and the impact of mortgage renewals on household spending.
ÎÚÑ»´«Ã½ employers reported a surge in payroll counts in March following a February decline. From the latest Survey of Employers, Payroll and Hours, March saw an increase of 7,729 positions (up 0.3 per cent), and the total job count in ÎÚÑ»´«Ã½ rose to 2.56 million positions. Goods-producing industries reported a 0.5-per-cent gain—the equivalent of 2,063 more positions—while services-producing industries added 2,078 roles (up 0.1 per cent). The seasonally adjusted job vacancy rate dropped to 3.9 per cent in March and 9,270 fewer vacancies (down 8.6 per cent) were reported. Total vacancies reached 97,845 positions. The job vacancy rate has fully retreated to pre-pandemic levels, signalling slack in the labour market.
Goods-producing industries saw broad and modest increases of job count among sectors except in utilities, which had a slight decrease in payrolls. Despite the monthly increase (1,093 more positions or 0.7 per cent higher), the job count remained low. Broad gains in the number of payrolls were seen among services-producing industries in March except professional, scientific and technical services (5,860 fewer positions or down 3.1 per cent). Notable increases were reported in educational services (1,168 more positions or 0.6 per cent), and accommodation and foodservices (2,781 more positions or 1.3 per cent).
On the wage front, seasonally adjusted average weekly earnings in ÎÚÑ»´«Ã½ edged up 0.3 per cent to $1,256.92 compared to February, when there was a 0.1-per-cent increase in wages. On a year-over-year basis, March’s average earnings in ÎÚÑ»´«Ã½ were 5.4 per cent higher than March 2023 and remain strong.
Bryan Yu is chief economist at Central 1.
