"Strong employment gains, rising consumer confidence and a bustling housing resale activity have stoked the appetite for big-ticket purchases, giving a boost to retail sales in recent months"
-Emanuella Enenajor, CIBC economist
Canada's inflation climbed in October at the slowest pace in five months amid falling gasoline prices, Statistics Canada reported Friday. The all-items CPI rose 0.7% on an annual basis, against market expectations for a 0.8% increase, following September's gain of 1.1%. The annual core rate that excludes volatile food and energy components, rose 1.2% in line with analysts' predictions. On a monthly basis headline inflation fell 0.2%, whereas core inflation climbed 0.2%. The weaker-than-expected inflation data continues a trend of lukewarm price increases, and reinforces the nation's central bank's recent decision to drop its rate-hike bias.
Meanwhile, Canada's retail sales rose for a third straight month in September, largely due to an increased appetite for new vehicles. The September data came as sales at new car dealers rose 5%, the largest monthly increase since January 2009, while sales at part dealers advanced 4.1%. However, when the auto sector is excluded, retail sales remained flat at C$31.01 billion. Overall retail sales inched up 1% to 40.73 billion Canadian dollars for the month, overshooting analysts' expectations for 0.3% climb. On an annual basis retail sales rose 3.6%. Canadian policy makers are awating a pickup in business investment and exports to boost economic growth as consumers curtail their spending habits to deal with record levels of debt.
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