Retail sales increased 0.7 percent in April, the fastest since September last year, Statistics Canada said.

After a 0.2 percent drop in March that disappointed analysts who had forecast a 0.1 percent gain, the April results showed consumer demand was picking up, although the trade sector remains below December 2023 levels. Sales of motor vehicles and parts rose 1 percent, the second straight month of growth.

New vehicles have sold $890 million since March, accounting for the bulk of the gains this year.

But the picture is far less positive in other categories. Instead of the expected 0.3 percent gain, demand for furniture, electronics and appliances fell, causing sales to fall 0.6 percent.

“This reflects buyer caution as mortgage renewals become more attractive,” Catherine Judge, an economist at CIBC, Canadian Imperial Bank of Commerce, wrote in a note to investors.

“On a per capita basis, sales volumes look even worse, falling below last year’s levels.”

Yuri B