The federal agency reported that retail sales rose by 0.2 per cent in September, contrary to the general consensus among analysts that sales would hold steady with August.
Statscan also revised August's gain down slightly, to 0.7 per cent from 0.8 per cent.
September's gain, driven by greater consumer spending on furniture, food and clothing, contrasted with other recent indicators that suggested that economic growth is beginning to feel pressure from the strong Canadian dollar.
One such indicator came last week, when sales at the wholesale level dropped by 1.9 per cent in September from August. Shipments of finished goods from the nation's factories also fell in September, by 0.6 per cent, while the nation's trade surplus plunged by 21 per cent from August.
The bleak reports raised concerns that the persistent strength of the loonie has begun to dissuade foreign markets from buying Canadian goods, since they have grown more expensive. The export sector is a major component of the Canadian economy. To keep the domestic economy from running out of steam, the Bank of Canada relies on adjustments to its benchmark overnight lending rate.
Already two rate hikes have come in recent months. The recent spate of bad economic news has led some market watchers to reduce their expectations for a third rate hike by the Bank of Canada from its last interest rate decision of the year on Dec. 7.
Monday's stronger-than-expected retail report, as well as bullish comments from central bank chief David Dodge in Germany early Monday morning, has most analysts still expecting that third rate hike next month.
If the Bank of Canada acts as it has in the past two months, a December rate hike would leave the bank's key rate at 2.75 per cent, up from mid-year low of two per cent and at the same point at which it began this year.
In September, Statscan said sales of furniture and electronics jumped by 1.3 per cent from August. Compared to one year ago, sales in this category were up by six per cent.
Food and beverage sales rose by 1.1 per cent, while clothing sales were up by 1.4 per cent.
In the general merchandise sector, department store sales were up by 0.1 per cent from August and by 5.5 per cent from a year ago, to $1.85 billion. By comparison, sales at the 27 largest department store sales in Ottawa-Gatineau were up by only 2.5 per cent from a year ago, to $76.2 million.
Nationally, Statscan reported that the big weak spot in September was auto sales, down by one per cent. Excluding auto sales, which are prone to monthly volatility, retail sales were actually up by 0.6 per cent in September from August.
For the third quarter as a whole, retail sales were up by 1.4 per cent from the second quarter. Retail sales in the second quarter were also up by that amount from the first three months of 2004.
The first quarter has so far been the strongest of the year, with retail sales up by 2.3 per cent from the fourth quarter of 2003.
