BMO Says Retail Sales Data Adds To Generally Soft Bag of Recent Indicators, Weighing on Real GDP

09:16 AM EST, 12/19/2025 (MT Newswires) -- Bank of Montreal said Friday it sees positive, but sluggish, real consumer spending growth in 2026, following the release of complete retail sales figures for October and an estimate on it for November.

Overall, BMO said it has been a mixed bag for Canadian consumers heading into 2026. BMO noted a strong equity market and stabilizing job market are lending support to consumers, but it also noted households will face peak mortgage renewals through the middle of next year, while population growth has stalled, limiting the number of spenders.

A generally soft bag of indicators for the month likely leaves real gross domestic product on pace for a 0.2% decline in October, according to the bank.

BMO noted retail sales dipped 0.2% month over month in October, a touch softer than expected, However, Statistics Canada's early look at November points to a strong 1.2% month-over-month rebound heading into the holiday season,

On the October data, BMO noted that excluding autos, sales were down 0.6% month over month, while stripping out autos and gasoline left sales down 0.5% month over month. Across categories, food & beverage, clothing and general merchandise were soft, offset partly by gains in furniture, building materials and autos.

All in, the soft tone to October should be offset by a solid November, although the latter will be flattered a bit by higher gasoline and goods prices, the bank said.

At the provincial level, BMO noted it was a very mixed bag in October. From a year ago, retail sales were running at 2% year over year, with outperformance in Atlantic Canada and British Columbia.

Meanwhile, retail spending volumes fell 0.6% month over month in October, continuing a choppy but clearly flattening spending pattern, pointed out BMO. Volumes are now down 0.1% from a year ago, and have fallen 4% annualized over the latest six months.

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