Bad weather may have kept Canadians away from retail shops in February, Statistics Canada said when it reported today that retail sales unexpectedly dropped in February as consumer spending fell for the first time in five months.

Retail sales fell 0.7% in February to an estimated $35.5 billion, according to the federal agency.

“A series of winter storms and the new Family Day holiday may have affected Ontario retail sales in February,” it said.

The grim retail data comes just a day after the Bank of Canada slashed interest rates by 50 basis points, to 3%.

None of the eight retail trade sectors tracked by the federal government agency showed higher sales during the month, and two — the automotive and clothing sectors — posted reductions of 1% or more.

Factoring out sales by dealers of new, used and recreational vehicles and auto parts, retail sales edged down 0.3% in February, the second decrease in seven months, Stats Can said.

Economists had been looking for an overall retail sales increase of 0.1%. Their projection for sales excluding the auto sector was for an increase of 0.4%.

“While the doom-and-gloomers will jump all over this one-month slide, spending is still on track for quite a healthy performance in Q1 overall and activity is still posting very solid year-on-year increases,” wrote BMO deputy chief economist Douglas Porter, in a morning commentary. “Spending fundamentals remain sound in Canada, and confidence is holding up relatively well. With job growth still chugging along, wages rising, interest rates falling, and some modest tax relief flowing, this sales drop does not look like the start of a trend.”

Sales in the automotive sector dropped by 1.3% in February, ending a four-month run of advances. Dealers of used and recreational vehicles and auto parts saw their sales drop 2.8% in February, the biggest retreat since June 2007. Sales by new car dealers were down 1.7%.

The clothing and accessories sector saw a 1% decline in February sales.

By province, Ontario posted the most significant reduction in sales. Consumer activity in the province dropped by 1.6% in February.

“While both the retail and wholesale sales reports for February were disappointing, employment, housing starts and manufacturing sales posted healthy gains, pointing to another month of positive GDP growth,” wrote Dawn Desjardins, senior economist at RBC. “Our estimate is that the economy eked out a 0.1% gain in February which, combined with January’s strong performance, still keeps our forecast that the economy recorded a 1.2% annualized growth rate on track.”