Canadian underlying inflation remains below BoC's target; Retail sales advance 0.2% in November

Canadian consumer prices fell for the second straight month in December, official figures revealed on Friday. Statistics Canada reported its headline Consumer Price Index dropped 0.2% in December, following the preceding month's 0.4% fall and falling behind expectations for a reading of 0.0%. On an annual basis, the Index jumped 1.5%, after rising 1.2% in November. Nevertheless, economists anticipated an increase of 1.7%. Meanwhile, underlying inflation grew in a rage from 1.4% to 2.0% on a yearly basis. In terms of annual inflation, gasoline prices contributed most, climbing 5.5% on yearly basis in December. Although the following increase was offset by the price of food, which declined 1.3% year-over-year. The Bank of Canada expects inflation to move closer to its target of 2% in 2017, suggesting that higher energy prices will offset weak food prices. Separately, Statistics Canada reported retails sales advanced 0.2% in November, missing a 0.5% gain forecast. A report also showed October's 1.1% rise was revised up to 1.2%. Furthermore, core retail sales grew 0.1% in the same month, meeting projections but falling from October's 1.4%. Sales saw growth in five out of 11 categories. In the report, Statistics Canada said that retailers reported mixed result in November due to Black Friday, the so-called Super Bowl of the retail selling season.