- Mark McCormick, Toronto Dominion Bank
Canadian retail sales dropped more than was forecasted in March, after two months of strong gains from February, against the background of consumers who bought fewer cars and home furnishings. Statistics Canada reported a 1.0% decline in retail sales that exceeded economists' forecasts for a 0.6% decrease. In volume terms, sales in March declined 1.3%, while sales at car and parts dealers dropped 2.9% as Canadians bought fewer new and used cars. In addition, core retail sales, which exclude autos slipped 0.3%. Purchases at furniture stores tumbled 3.7%, while lower prices pulled sales at gasoline stations down 1.1% to their lowest since August 2010.
Furthermore, a separate research showed that Canadian inflation rose in line with forecasts in April. According to the report from Statistics Canada, April consumer price inflation rose 0.3% from the previous month, in line with the consensus forecast and below March's 0.6% increase. Year-on-year CPI advanced 1.7%, in line with forecasts in comparison with April's reading of 1.3%. However, core inflation, which excludes food and energy, rose 0.2% from the prior month, compared to the expected 0.1% gain, while year-on-year core CPI climbed by 2.2%, beating the forecasts for a 2.0% gain and March's 2.1% increase.
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