Retail sales rose in June, increasing 1% to $34.4 billion, Statistics Canada said Monday.

Gasoline was the driving force behind most prices, StatsCan said, as retail sales in volume terms increased 0.4%.

The agency said retail sales have risen in five of the last six months, following large drops at the end of 2008.

June’s growth in sales beat economist expectations for much more modest growth of 0.2%.

“The recovery in Canadian consumer spending appears to have gained some momentum,” commented economist Diana Petramala at TD Economics, adding that the sales report involved “good news all around.”

Sales rose in six of eight retail trade sectors in June.

The automotive sector was the largest contributor to overall growth, with a 2.1% sales gain.

A 4.7% rise in sales at gasoline stations was the main contributor to June’s increase in the automotive sector, with higher gas prices driving the advance.

Excluding gasoline, retail sales growth rose was still positive at 0.5% during the month. This indicates an improvement in consumer confidence, according to CIBC World Markets economist Krishen Rangasamy.

“The consumer’s mood is beginning to warm up,” Rangasamy said. “The improved confidence is corroborated by the rebound in the housing market and is a big positive for growth going forward.”

Retail sales were up in nine provinces in June. Sales in Quebec rose 1.8%, making it the largest contributor to the national increase.

The only province where sales decreased in June was New Brunswick.

Economists at RBC Economics Research said the overall sales growth was encouraging, but warned that continuing declines in investment and deteriorating net trade would likely offset the impact of consumer spending growth in the second quarter. They expect GDP to decline by 3.2% in the second quarter.

“This would represent an easing from the 5.4% drop in the first quarter, but it is clearly still indicative of a very weak economy,” said assistant chief economist Paul Ferley.