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TD Bank economist Marc Ercolao said the March retail sales data came in a bit warmer than expected. 

“Consumers pulled forward their auto purchases, something we expected as buyers front-ran counter tariffs imposed in April,” Ercolao wrote in a report.

However, Ercolao noted it wasn’t just autos that moved higher.

“The surprise was in the five of seven non-auto retail components that advanced on the month, which may represent stockpiling of non-discretionary items ahead of other incoming tariffs,” he said.

Core retail sales — which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers — rose 0.2 per cent in March.

Overall, Statistics Canada said retail sales in March were up in six of nine subsectors it tracks as sales at motor vehicle and parts dealers gained 4.8 per cent.

The increase for motor vehicle and parts dealers was the first move higher in three months for the subsector as sales at new car dealers rose 5.2 per cent and used car dealers gained two per cent.

Sales at building material and garden equipment and supplies dealers rose 2.6 per cent, while clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers also gained 2.6 per cent.

In volume terms, overall retail sales increased 0.9 per cent for the month.

BMO senior economist Shelly Kaushik said looking through the tariff- and energy-price-driven swings, it was still a decent retail sales report for March.

“The flash estimate points to some firmness in April, but the longer the trade war goes on, the more it will weigh on sentiment and spending,” Kaushik wrote in a report.

The retail sales data comes ahead of Statistics Canada’s reading for gross domestic product for March and the first quarter as a whole on May 30.

The Bank of Canada’s next interest rate decision is set for June 4.

This report by The Canadian Press was first published May 23, 2025.