OTTAWA - Canadian retail sales rebounded in January with the largest gain in nearly seven years as spending rose across most sectors, led by an increase in purchases of cars, Statistics Canada said on Tuesday.

The 2.2 percent increase topped economists' expectations for a gain of 1.1 per cent, while volumes were also robust, up 1.3 per cent. January's increase was the largest since March 2010.

“It's a bird, it's a plane, no it's a superheated Q1 economy for Canada,” wrote CIBC Capital Markets Chief Economist Avery Shenfeld in a report to clients.  

After unexpectedly strong wholesale trade and manufacturing figures for January, the retail sales report was likely to underscore expectations that the economy started 2017 on solid footing.

“That's going to make it difficult for the Bank of Canada to stick to its dovish spin in the April Monetary Policy Report, but it will put a lot of emphasis on political uncertainties stateside as a way of avoiding a turn to outright hawkishness,” Shenfeld added.

Sales were up in 10 out of 11 sectors, accounting for 98 per cent of retail trade. The motor vehicle and parts industry rose 3.8 per cent, making for the fourth gain in five months as sales rose at new and used car dealers.

Excluding autos, retail sales were up 1.7 per cent.

Four sectors recovered from weak December sales, including a 6 per cent jump at health stores and a 1.8 per cent increase at general merchandise stores.

Consumer spending was strong across the country, with retail sales up in every province.

Sales rose 2.4 per cent in Alberta, which has been hurt by the drop in oil prices. It was the fifth time in six months sales were up in the province, which has a large energy industry.

- with files from