- Credit Agricole
Canada's inflation accelerated to the fastest this year in July amid surge in food and automobiles and a weaker drag from lower gasoline prices. Cost of living in Canada increased 1.3% in the measured month from a year before, compared with the June figure of 1.0%, Statistics Canada reported. At the same time, the core rate, which strips out eight volatile components, surged 2.4%. Both gauges came in line with economists' expectations. Automobile prices jumped 2.5% in July from a year earlier, up from 2.0% in June. Food prices soared 3.2% including a 6.1% increase in meat. Gasoline prices, however, declined 12.2% on a 12-month basis in July, less than a 14.1% drop in June, Statistics Canada said. On a monthly basis, total inflation inched up 0.1% in July and the index of core prices remained unchanged.
In addition to that, Canada's retail sales rose more than expected in June amid increased sales of electronics and appliances. Sales inched up 0.6% to C$43.2 billion in June, after climbing downwardly revised 0.9% in May, Statistics Canada said. Meanwhile, core retail trade, which excludes volatile automobile and parts sales, edged higher 0.8% following the same uptick in May, and overshooting analysts' forecasts of a 0.5% improvement. The upbeat data is likely to slightly lift Canada's GDP estimates for the month and offer support to the Loonie Dollar, which has been under the pressure of lower energy prices.
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