Canada March retail sales up 0.7 pct on autos
- Author: Joanne Flowers May 20, 2017,
May 20, 2017, 21:15
On the other hand, fresh produce and clothing applied the most downward pressure on the inflation rate.
There's certainly no shortage of reasons why the Bank of Canada could start to think about higher interest rates.
"The modest core inflation we're seeing is probably the single, strongest argument the Bank of Canada has to do nothing", Porter said, adding that ongoing uncertainty over USA policy, particularly on trade, would be up there as well.
Economists said the reports released by Statistics Canada on Friday were not likely to move the Bank of Canada off the sidelines when it meets next week.
The central bank, which has an overall inflation target of 2 percent, has pointed to material slack in the economy.
"The fact that core (inflation) remains so muted is a fairly strong argument in favor of not following any lead by the Fed in the immediate future", said Doug Porter, chief economist at BMO Capital Markets. The indicators are closely scrutinized by the Bank of Canada.
Region wise, the rises were broad based with Quebec, Alberta and Newfoundland and Labrador the only provinces to register lower sales in the month.
The annual inflation rate matched Statistics Canada's reading for March but was below a consensus estimate of 1.7 per cent, according to Thomson Reuters data. Stripping out the effect of price changes, volumes climbed 1.2 per cent.
On the flip side, items which saw some of the the biggest drops in price were fresh or frozen beef (down 13 per cent), children's clothing (down 8.8 per cent) and cereal products (excluding baby food), which cost 8.1 per cent less than in April of past year.
Statistics Canada said the inflation rate was higher in three provinces, including Saskatchewan, which easily saw the biggest acceleration after it raised its provincial sales tax in late March.
Prices rose 0.4 percent on a monthly basis, lagging the 0.5 percent median economist forecast.
"In Manitoba, the price of gasoline was up 12.5 per cent in April compared to April 2016". The data followed a month-over-month February contraction of 0.4 per cent.
Sales rose in six out of 11 sectors in March, accounting for 53 percent of total retail trade.