The agency said sales were higher in seven of the nine subsectors it tracks with sales at motor vehicle and parts dealers up 2.2%, boosted by a 2.3% increase in sales at new car dealers.

“It’s rare to see a positive surprise from Canadian consumers these days, but the July retail sales report delivered,” Shelly Kaushik, an economist with BMO Capital Markets, said in a note to investors.

The period the figures covered was largely marked by people anticipating and then delighting in the Bank of Canada’s decision to cut its key interest rate in July. The central bank cut rates again in September to 4.25%.

The rate has weighed on shoppers, particularly those looking to make big purchases or take out mortgages, but as it’s been dropping, it’s delivered some relief to wallets.

That was reflected in core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers. They rose 0.6% in July.

Sales at food and beverage retailers increased because of a 1.2% jump in sales at supermarkets and other grocery retailers, a 2.1% climb at specialty food retailers and 0.4% rise at convenience retailers and vending machine operators.

Higher sales were also reported at health and personal care retailers in July.

In volume terms, Statistics Canada said retail sales across the month increased 1.0%.

However, sales at gasoline stations and fuel vendors fell 0.6% for the month as sales for the subsector in volume terms fell 1.7%.

Looking forward, Statistics Canada said its preliminary estimate for retail sales in August pointed to a gain of 0.5% for the month, though it cautioned the figure will be revised.

“As we’ve stressed many times before, spending growth pales in comparison to the population surge,” Kaushik said. “Consumers will need to see more rate cuts filter through the economy to see a more meaningful recovery.”

TD Bank economist Maria Solovieva also detected the same downward trend in retail spending.

“A good start to the quarter is unlikely to sway the odds decisively on whether the Bank of Canada will cut rates by 50 basis points in October,” she told investors in a note.