UPDATE 1-Harsh weather helps depress Canada Dec retail sales

Fri Feb 21, 2014 8:48am EST

* Retail sales down 1.8 pct in December vs. -0.4 pct forecast

* Sales ex-autos down 1.4 pct vs. 0.0 pct forecast

* Volume declines 2.2 pct

* Extreme weather hampered shopping in numerous sectors

OTTAWA, Feb 21 (Reuters) - Extreme weather helped slash Canadian retail sales by a seasonally adjusted 1.8 percent in December, data which will help cement expectations that the economy shrank in the month, according to a Statistics Canada release on Friday.

The fall, the biggest in 12 months, was far worse than the -0.4 percent median forecast in a Reuters survey of economists. The volume of retail sales, relevant for real gross domestic product, fell by even more, 2.2 percent.

December had already seen a 1.4 percent drop in wholesale trade, a 0.9 percent fall in manufacturing sales, a 4.1 percent decline in building permits, and a worsening in the trade deficit to C$1.7 billion ($1.5 billion) from C$1.5 billion in November. The weather was a factor in most of the declines.

The biggest decline in dollar terms was in the auto sector, down 3.2 percent. Severe weather helped cut building material and garden equipment sales by 8.2 percent and helped cut into Christmas shopping in a number of sectors.

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