Retail sales fall as vehicle purchases drop
Excluding automotive, sales were up 0.3
In volume terms, sales were up 0.1 in June

OTTAWA, Aug 23 Reuters Canada39;s retail sales dropped in June, data showed on Friday, as consumers continued to feel the impact of high interest rates and cut back on discretionary purchases.

Retail sales, which comprise local sales of vehicles, clothing, furniture, food and beverages among other items, dropped 0.3 on a monthly basis, less than last month39;s 0.8 decline.

The sales were pulled down primarily as fewer customers bought vehicles and automotive parts, but also by lower purchases of personal care products and sporting goods, Statistics Canada said.

Analysts had forecast that in June sales would drop by 0.3 and excluding automotive and parts, they had estimated it would drop by 0.2.

July39;s retail numbers, which surveys only half of the respondents for a preliminary estimate, showed that sales likely grew by 0.6, according to a flash estimate by Statistics Canada.

The Bank of Canada trimmed its key policy rate for the second time in a row in July, bringing it down to 4.5, after keeping it at a more than 23year high for a year.

Such elevated levels have crimped consumer spending and business investments and muted economic growth, even though they helped in easing consumer prices.

At the Bank of Canada39;s last monetary policy meeting last month, Governor Tiff Macklem hinted at shifting the bank39;s focus to boosting the…