"We don't think it's likely that the Canadian economy can lean on the consumer to generate much growth going forward"
- Ian Pollick, a senior fixed-income strategist at Royal Bank of Canada's capital markets unit
A bunch of economic data from Canada was unveiled on Friday, reflecting weak domestic demand and vulnerability of economic recovery, data from the Statistics Canada showed. The nation's inflation rate accelerated at a slower-than-expected pace, as a jump in natural gas prices was partly offset by a fall in transportation costs. A gauge of consumer prices climbed 0.7% last month from the same month a year earlier, following a 0.4% gain in April that was the slowest since October 2009. The core inflation, which excludes eight most volatile products, surged 1.1%, the same pace as in the prior month. Analysts, however, expected both inflation and core inflation to accelerate more, calling for 0.9% and 1.2% readings, respectively. The main reason for a weaker reading was a 15.4% jump in natural gas prices, which recorded the biggest monthly increase since December 2008.
Also Friday Statistics Canada said that sales at Canadian retailers rose less than expected in April, due to a decline in gasoline and clothing sales that even offset an increased spending on new vehicles, electronics and appliances. The value of sales edged higher 0.1% totalling 39.52 billion Canadian dollars, compared with an unrevised flat reading in March. Meanwhile, sales excluding vehicles and auto parts shrank by 0.3%.
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