Canadian retail sales were expected to slow in February, after four months of strong gains, but they came in well under consensus expectations this morning.

Sales slid 0.1% to $25.2 billion in the month. Economists were calling for a gain of 0.5%. Auto sales were notably weak, as were furniture volumes. RBC notes that Ontario saw the most weakness, with sales down -2.0%, while Quebec retailers basked in a 2.2% sales rise. “Overall, the report is somewhat disappointing, but don’t read too much into a single month’s weakness in a volatile trend on the heels of strong growth in previous months,” it says.

BMO Nesbitt Burns notes that, even with the latest decline, real retail sales are still on track for annualized growth of 10%-to-11% in the first quarter. “This should backstop expected GDP growth of about 5% in the quarter.”

CIBC World Markets agrees with the sanguine reaction to these numbers, saying, “After four huge monthly gains, you can’t read too much into a small slip in retail spending in February. Given the series of blowout retail figures recorded in the lead up to this report, we’re not inclined to view one or two months of softer numbers as evidence of flagging consumer enthusiasm.” It also sees GDP sticking in the 4.5%-5% range.

“Today’s disappointing headline represents a mild negative for the Canadian dollar, while at the same time offers modest support for the front end of the Canadian yield curve. However, with the economy finding its legs much sooner than expected, expect Dodge and company to deliver another quarter-point hike before we see the Fed’s first tightening move,” says CIBC.