BCREA ECONOMICS NOW
Canadian Inflation and Retail Sales – September 22, 2017
Canadian inflation, as measured by the Consumer Price Index (CPI), registered 1.4 per cent in the 12 months to August. That is a slight uptick from 1.2 per cent in July. The Bank of Canada’s three measures of trend inflation were also up slightly, averaging 1.5 per cent. In BC, provincial consumer price inflation was 2.0 per cent in the 12 months to August.
Canadian retail sales increased 0.4 per cent on a monthly basis in July and were 7.8 per cent higher year-over-year. Sales were higher in 6 of 11 retail sub-sectors with the main contribution coming from motor vehicle dealers and food and beverage stores. In BC, vigorous consumer spending continues to set the pace for the BC economy. Retail sales in the province climbed 0.7 per cent on a monthly basis and were up 12.3 per cent year-over-year.
Despite rapid economic growth in Canada, there is still very little sign of inflation. With inflation reading well below the Bank of Canada’s 2 per cent target once again in August, the case for a further rate increase in October is lessened though not completely closed.