- Jack Spitz, managing director of foreign exchange at National Bank of Canada
Canada's wholesale trade fell in May led by a decrease in motor vehicle sales, according to Statistics Canada. Sales decreased by 1.0% to C$54.5 billion, exceeding economists' expectations for a flat reading, and marking the biggest decline in four months. Sales were also down 1.0% in volume terms. Lower sales in four subsectors accounted for the decrease, making up 65% of overall wholesale trade. The biggest drag came from the motor vehicles and parts industry, which plunged 3.1%, after a strong recovery in the previous month. Excluding the sector, wholesale trade decreased just 0.6%. Other falls were recorded in the machinery, equipment and supplies, as well as personal and household goods. The miscellaneous sector, which includes agricultural supplies and chemical products, dropped 3.7%, the fourth decline in five months. However, some of those decreases were slightly offset by rises in food, beverage and tobacco. Inventories climbed 0.1% to C$71.7 billion in May, the seventh consecutive month of increases. Inventories rose in four out of seven sectors, led by a 2% gain in the personal and household goods group.
The BoC's July's Monetary Policy Report revised its second quarter growth outlook from a positive 1.8% to a negative 0.5% and downgraded Q3 from 2.8% to 1.5%.
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