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“It’s easy to build up a pretty negative case,” said Douglas Porter, chief economist at BMO Capital Markets.

“Exports were down 10% from a year ago. Governments are in restraint mode, consumers are retrenching, housing starts have dropped,” he said.

“Yet, the Bank of Canada and the Finance Department seem to believe that business investment is going to come running to the rescue by itself. That is just not going to happen — not in this kind of environment.”

After five straight months of meager increases, Statistics Canada said Friday that shoppers dramatically pulled back on their spending in December, with sales falling 2.1%.

That was the largest monthly drop since April 2010, when sales were down 2.4%.

Purchases of new cars led the December decline, falling 7.7%, ending a six-month string of advances. Overall, sales at vehicle and auto-parts outlets were down 6.4% for the month.

Together with fewer purchases in other sectors — such as electronics and appliances — tracked by the federal agency, the monthly declines accounted for 58% of all retail activity in Canada.

The drop in seven of the 11 categories during the month — traditionally the prime shopping period — sheds some light on how gains in consumer prices have been weakening throughout 2012.

That trend likely continued in January, although a slight uptick is possible but not sustainable. We won’t find out the exact numbers for that month until March 21.

Inflation data for January, released in a separate report from Statistics Canada on Friday, may have foreshadowed the ongoing weakness in the retail sector last month.