UPDATE 1-Canadian retail sales up 0.7 pct in May to new record

(Adds background on auto sales, wholesale trade)

OTTAWA, July 23 (Reuters) - Strong car sales helped push Canadian retail trade up by 0.7 percent in May to C$41.98 billion ($39.23 billion), eclipsing April's record sales, Statistics Canada reported on Wednesday.

Sales by motor vehicle and parts dealers, which account for just under one quarter of total retail sales, were up 2.5 percent. Excluding this sector, retail sales rose 0.1 percent, and excluding the auto sector and gasoline, retail sales were down 0.3 percent. The figures are adjusted for seasonal factors.

Statistics Canada's New Motor Vehicle Sales Survey had reported a record 197,740 units sold in May.

The median forecasts in a Reuters survey of analysts were for a 0.6 percent rise in overall retail sales and a 0.3 percent gain excluding autos and parts. On Friday, Statistics Canada had reported a 2.2 percent gain in wholesale trade, marked by a 9.8 percent jump in motor vehicles and parts.

In volume terms, relevant for calculating real moves in gross domestic product, retail sales rose by 0.4 percent.

(Reporting by Randall Palmer; Editing by Chizu Nomiyama)