OTTAWA — Canadian retail sales rose 0.8% in March, surpassing expectations and suggesting consumer resilience despite looming U.S. tariffs. Statistics Canada reported that motor vehicle and parts dealers led the gains with a 4.8% increase, as buyers rushed to make purchases ahead of anticipated trade measures. Sales were up in six of nine subsectors, accounting for nearly 59% of total retail activity.

Preliminary estimates indicate a further 0.5% rise in April, though economists caution that the momentum may be short-lived. Bank of Canada Governor Tiff Macklem noted that second-quarter growth is expected to be “quite a bit weaker” than the first, with potential for further decline if tariff uncertainties persist.

Market expectations for a 25-basis-point interest rate cut in June remain at 32%, unchanged from prior to the data release. Stephen Brown, deputy chief North America economist at Capital Economics, stated that a rate cut is still likely due to recent declines in private sector employment, though it will be a close call. 

The central bank previously forecasted an annualized first-quarter GDP growth of 1.8% but withheld further projections amid ongoing trade uncertainties. Statistics Canada is scheduled to release Q1 GDP data on May 30.