Canadian retail sales petered out in September after a stronger-than-expected rebound in the previous month.

Receipts for retailers dropped 0.5 per cent last month, according to an advance estimate released Friday by Statistics Canada. That erases much of a 0.7 per cent jump in August, according to the agency, and brings sales down near July levels, a very weak month that saw receipts fall by 2.2 per cent -- the biggest drop in more than a year.

The August rebound, however, was stronger than economist forecasts for a 0.2 per cent gain and preliminary estimates from the statistics agency of a 0.4 per cent increase. The gain was led by grocery and auto sales. In volume terms, sales jumped 1.1 per cent in August.

The report suggests there was a boost in August to household purchasing power from falling gasoline prices, but it was short-lived as the Bank of Canada’s rate hikes continue to impact consumer demand. Recent economic data suggest the Canadian economy has already begun to slow down from a strong first half of 2022.

The statistics agency didn’t provide details of the September number, which is based on responses from 48.3 per cent of companies surveyed.

Sales rose in six of 11 subsectors in August, representing 65 per cent of retail trade. Excluding autos and parts, retail sales also increased 0.7 per cent.