Canada Retail Sales MoM: November 2025 Release and Macroeconomic Implications
Table of Contents
Canada’s retail sales for November 2025 came in flat at 0.00% MoM, according to the latest release from the Sigmanomics database[1]. This contrasts with the prior month’s 1.00% increase and falls short of the 0.50% consensus estimate. The flat reading marks a notable deceleration from the strong rebound in July (1.60%) and the moderate gains in April (0.70%) and May (0.80%). However, it also follows two consecutive months of declines (-0.80% in both August and September), highlighting ongoing volatility in consumer spending.
Drivers this month
- Stalled growth in core retail sectors such as clothing and electronics.
- Weakness in auto sales and discretionary goods, reflecting cautious consumer sentiment.
- Stable but subdued shelter-related retail spending, contributing marginally.
Policy pulse
The flat retail sales print arrives amid ongoing Bank of Canada tightening, with the policy rate at 5.25%, aimed at curbing inflation that remains above the 2% target. The data suggests consumer spending is responding to higher borrowing costs and elevated inflation, limiting discretionary outlays.
Market lens
Immediate reaction: The CAD/USD currency pair weakened by 0.30% in the first hour post-release, while 2-year government bond yields edged down 5 basis points, reflecting increased caution among investors.
Retail sales are a key macroeconomic indicator reflecting household consumption, which accounts for roughly 60% of Canada’s GDP. The November print’s stagnation contrasts with the 12-month average monthly growth of approximately 0.40% since November 2024, underscoring a slowdown in consumer momentum.
Monetary policy & financial conditions
The Bank of Canada’s restrictive stance, with five consecutive rate hikes since mid-2024, has tightened credit conditions. Higher mortgage rates and borrowing costs are dampening consumer spending power, particularly in big-ticket items. Inflation remains sticky at 3.10% YoY, pressuring real incomes.
Fiscal policy & government budget
Federal fiscal policy remains moderately expansionary, with recent stimulus measures targeting low-income households and infrastructure investments. However, these have yet to translate into stronger retail sales growth, suggesting a lag or limited pass-through to consumer demand.
External shocks & geopolitical risks
Global trade tensions and supply chain disruptions continue to weigh on retail inventories and pricing. The ongoing uncertainty around US-Canada trade relations and energy markets adds to consumer caution, limiting spending growth.
Sectoral breakdowns reveal that discretionary retail categories, including apparel and electronics, contracted by 0.50% MoM, while essential goods remained flat. Auto sales, a historically volatile component, fell 1.20%, reflecting tighter credit and higher vehicle prices. Shelter-related retail sales edged up 0.10%, providing minimal support.
This chart highlights a trend of slowing retail sales growth, reversing the mid-year recovery. The data suggests consumers are increasingly cautious, likely due to inflation pressures and tighter financial conditions. The pattern warns of potential headwinds for Q4 GDP growth.
Market lens
Immediate reaction: The Canadian dollar weakened modestly against the US dollar, reflecting investor concerns about consumer demand strength. Short-term government bond yields declined, signaling expectations of slower economic growth and potential easing of monetary policy later in 2026.
Looking ahead, retail sales growth in Canada faces a complex mix of risks and opportunities. The base case scenario projects a modest rebound to 0.30% MoM average growth in Q1 2026, supported by easing inflation and stable employment. Probability: 55%.
Bullish scenario (25% probability)
- Inflation falls rapidly below 2%, boosting real incomes.
- Monetary policy pauses or eases, lowering borrowing costs.
- Consumer confidence improves with stable global trade conditions.
- Retail sales accelerate to 0.70% MoM or higher.
Bearish scenario (20% probability)
- Inflation remains elevated, eroding purchasing power.
- Further monetary tightening to combat inflation.
- Geopolitical shocks disrupt supply chains and trade.
- Retail sales contract by 0.50% MoM or more.
Financial markets will closely monitor upcoming inflation prints, employment data, and Bank of Canada communications for clues on policy direction. Retail sales remain a bellwether for consumer health and overall economic momentum.
The November 2025 retail sales data from Canada signals a pause in consumer spending growth amid a challenging macroeconomic backdrop. The flat MoM reading contrasts with prior months’ volatility and underscores the impact of tighter monetary policy and persistent inflation. While fiscal support and easing external risks could revive growth, downside risks from global uncertainties and inflation persistence remain significant.
Investors and policymakers should weigh this data alongside other indicators to gauge the trajectory of Canada’s economy. The retail sector’s performance will be a critical input for the Bank of Canada’s future rate decisions and for market sentiment heading into 2026.
Key Markets Likely to React to Retail Sales MoM
Retail sales data is a vital gauge of consumer demand and economic health, influencing currency, bond, equity, and commodity markets. The following tradable symbols historically track or react to Canadian retail sales fluctuations:
- CADUSD – The Canadian dollar versus the US dollar often moves in tandem with retail sales strength or weakness.
- SU – Suncor Energy, a major Canadian energy stock, correlates with economic activity and consumer demand.
- RY – Royal Bank of Canada’s stock price reflects credit conditions and consumer borrowing trends.
- BTCUSD – Bitcoin’s price can reflect risk appetite shifts linked to economic data surprises.
- EURUSD – The euro-dollar pair often reacts to global risk sentiment influenced by Canadian economic data.
Insight: Retail Sales vs. CADUSD Since 2020
Since 2020, monthly Canadian retail sales growth has shown a positive correlation (~0.45) with the CADUSD exchange rate. Periods of strong retail sales growth, such as mid-2021 and early 2024, coincided with CAD appreciation. Conversely, retail sales contractions often preceded CAD weakness, reflecting investor concerns about Canada’s economic outlook. This relationship underscores the importance of retail sales as a leading indicator for currency traders.
FAQs
- What does the November 2025 Retail Sales MoM data indicate for Canada’s economy?
- The flat 0.00% MoM reading suggests a pause in consumer spending growth, signaling caution amid inflation and tighter monetary policy.
- How does retail sales data impact monetary policy decisions?
- Retail sales reflect consumer demand strength, influencing the Bank of Canada’s assessment of inflationary pressures and the need for rate adjustments.
- Why is retail sales data important for currency markets?
- Strong retail sales often boost the Canadian dollar by signaling economic resilience, while weak sales can trigger depreciation due to growth concerns.
Key Markets Likely to React to Retail Sales MoM
Retail sales data is a vital gauge of consumer demand and economic health, influencing currency, bond, equity, and commodity markets. The following tradable symbols historically track or react to Canadian retail sales fluctuations:
- CADUSD – The Canadian dollar versus the US dollar often moves in tandem with retail sales strength or weakness.
- SU – Suncor Energy, a major Canadian energy stock, correlates with economic activity and consumer demand.
- RY – Royal Bank of Canada’s stock price reflects credit conditions and consumer borrowing trends.
- BTCUSD – Bitcoin’s price can reflect risk appetite shifts linked to economic data surprises.
- EURUSD – The euro-dollar pair often reacts to global risk sentiment influenced by Canadian economic data.
November’s 0.00% MoM retail sales growth contrasts sharply with October’s 1.00% gain and underperforms the 12-month average of 0.40%. The volatility over the past six months is notable: July’s peak at 1.60% was followed by two months of -0.80% declines, then a rebound in October. This pattern signals uneven consumer confidence and spending power.
Key figure: The six-month average growth rate now stands at just 0.28% MoM, down from 0.45% in mid-2025, indicating a deceleration trend.