Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.
Rise in Canadian retail sales brightens outlookMonday, April 25, 2016 > 11:26:34
(The Globe and Mail)
Canadian retail sales unexpectedly rose in February, the second consecutive monthly increase, brightening the outlook for an economy that is on track to rack up strong growth in the first quarter.
Separate data from Statistics Canada on Friday showed Canada’s annual inflation rate dipped toward the lower end of the central bank’s target range largely due to lower gasoline prices.
But economists were focused on the 0.4 per cent rise in February’s retail sales, which bested forecasts for a decline of 0.8 per cent.
Sales volumes, which remove the effects of price changes, posted an even more robust 1.5 per cent gain.
Recent data has suggested that Canada’s economy slowed in February after a strong start to the year, but the retail sales report suggested the consumer sector was the exception.
Economists still expect relatively robust economic growth for the first three months of the year as the country bounces back from the slump in oil prices that triggered a mild recession last year.
“This is turning out to be a rather strong quarter for the consumer and a strong quarter overall for broad GDP growth,” said Derek Holt, an economist at Scotiabank.
The Canadian dollar added to gains against the greenback immediately after the reports, while traders did not alter their expectations that the Bank of Canada is likely to keep interest rates unchanged for now.
Consumers bought more cars and clothes in February, though gains were broad with higher sales in nine of 11 sectors.
Canada’s annual inflation rate fell to 1.3 per cent in March from the previous month’s 1.4 per cent. Analysts had expected inflation to be 1.2 per cent last month.
On a year-over-year basis, the gasoline component was down 13.6 per cent. Excluding gasoline, the inflation rate was 1.9 per cent.
Overall, prices were up in six of the consumer price index’s eight major components, with food and shelter leading the way higher. Food prices rose 3.6 per cent as consumers paid more for fresh fruit, vegetables and meat than they did a year ago.
Core inflation, which strips out some volatile items and is closely watched by the Bank of Canada, was 2.1 per cent, up from 1.9 per cent in February.
The central bank has an inflation target of 1 per cent to 3 per cent, but it has said it is looking through some of the temporary factors that are currently impacting the rate.