CIBC Says "Lackluster Trend" In Real Spending Is "Supporting the Need" For Another BoC Rate Cut In October

09:16 AM EDT, 09/19/2025 (MT Newswires) -- Over at CIBC, Katherine Judge said Friday's retail sales data is supports the need for another Bank of Canada rate cut in October, after the central bank as expected reduced the policy rate by 25 basis points to 4.5% just two days ago.

Judge noted Canadian retail sales continued to seesaw in July, with the 0.8% drop in sales erasing half of the prior month's gain. She also noted the declines were broad based, with eight of nine subsectors falling, and the core sales group (ex. gasoline and vehicles) down by 1.2%, led by a pull back at grocery stores and clothing stores. In volume terms, sales decreased by 0.8% m/m, leaving the level of real sales roughly unchanged since the end of last year, as consumers have remained cautious amidst the deterioration in the labour market and trade uncertainty.

While Judge noted the advance estimate for August suggested a 1.0% increase, she said looking through the monthly volatility still shows a "lackluster trend" in real spending, "supporting the need for another BoC cut in October."

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