Canada – The consumer price index rose 0.3% in April, causing the year-on-year inflation rate to rise five ticks to 2.0% (from 1.5%). That’s the first time in two years that inflation hits the Bank of Canada’s 2% target. In seasonally adjusted terms, CPI rose 0.2%, as six of the eight broad categories saw price increases. Price gains for food, shelter, household equipment, transportation, clothing/footwear and health/personal care more than offset price declines for recreation/education and alcohol/tobacco products. The core CPI, which excludes eight of the most volatile items, rose 0.2%, allowing the year-on-year core inflation rate to rise one tick to 1.4%. In seasonallyadjusted terms, core CPI rose 0.2%. With April’s CPI and assuming seasonal patterns hold in May and June, Q2 yearon- year inflation is tracking 2.1% for the headline and 1.5% for the core. Those are much higher than the Bank of Canada’s estimates from last April’s Monetary Policy Report which had Q2 year-on-year inflation at just 1.6% for the headline and 1.2% for the core.
Retail sales fell 0.1% in March. Sales were down in 7 of the 11 subsectors, including autos (-0.7%, as gains for used car dealers were dwarfed by losses for dealers of new vehicles and parts). Excluding autos, sales were up 0.1%, as gains for retailers selling food, furniture/home furnishings, electronics, and gasoline more than offset losses for retailers of general merchandise, building materials, health care products, clothing/accessories, sporting goods, and miscellaneous items. In real terms overall retail sales fell 0.2%. Five provinces saw declining nominal sales in March (including Ontario and Quebec), while the other five saw gains (all four western provinces, plus Newfoundland & Labrador). On a year-on-year basis, Alberta continues to lead the nation with nominal sales up 11.1%, followed by Saskatchewan at +9.1%, Manitoba at +4.1%, and BC at +3.6%. For Q1 as a whole, retail volumes grew just 0.1% annualized, compared with strong gains in the prior quarter.
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