Consumers in Canada have binged on cheap credit and are spending strongly as commodity prices and the jobless rate drop.

(Bloomberg)—Canadian retailers posted a fourth-straight monthly sales gain in June, closing off a half-year performance that was one of the best for the sector on record.

Retail e-commerce sales in June (on an unadjusted basis) were C$1.201 billion (US$955.5 million) up 43.5% from C$836.65 million in June 2016, according to Statistics Canada. E-commerce accounted for 2.2% of total retail sales in June compared with 1.6% in the year-ago period, the agency reported.

Total retail sales increased 0.1% during June to C$49 billion ($39 billion), Statistics Canada reported. Retailers generated C$291 billion in sales in the first six months of 2017, a record. Sales were up 4.6% from the last half of 2016, which is the biggest half-year gain in the data going back to at least the early 1990s.

“Higher sales at general merchandise stores, clothing and clothing accessories stores, and building material and garden equipment and supplies dealers offset lower sales at motor vehicle and parts dealers and gasoline stations. Excluding the latter two subsectors, retail sales were up 1.1%,” Statistics Canada stated in its report.

Canada has been in a consumption boom for years, as households binged on cheap credit. The appetite for spending has only increased over the past six months as the country emerged from the drop in commodity prices and the jobless rate fell to the lowest since 2008.

advertisement

It’s a remarkable run in spending that policy makers expect will continue, even as the Bank of Canada raises interest rates. Households will account for about two-thirds of growth over the next three years, the central bank projected last month. That would extend a pattern over the past 15 years that has seen consumers carry the bulk of the economic load.

“The retail sector continues to look strong,” Andrew Grantham, an economist at CIBC World Markets, said in a note to investors.

The Canadian dollar advanced following the report.

The June numbers included a 1.4% drop in sales for motor vehicle retailers and parts dealers. Excluding those, sales were up 0.7% in June versus expectations of a 0.1% gain. Economists had forecast a 0.2% gain for total retail sales during the month.

In volume terms, receipts for retailers increased 0.5% and are up 7.8% from a year earlier, which is the biggest 12-month increase since at least 2004.

advertisement