"It just suggests that maybe the Canadian consumer is growing a bit tired of carrying the burden of growth. And we don't really have a lot of other things that are supporting growth right now if the Canadian consumer steps back".
- David Watt, HSBC
Canadian consumer prices grew less than expected in July, fresh data revealed on Friday. According to Statistics Canada, the central bank's core Consumer Price Index (CPI) came in at 0.0% on a monthly basis and at 2.1% on an annual basis in July, in line with analysts' expectations and the preceding month's readings. Overall, Canada's consumer prices dropped 0.2% month-over-month in the seventh month of the year, compared to the 0.2% hike seen in June, while economic desks expected the indictor to come in at 0.0% in the reported month. Year-over-year, inflation rose 1.3% in July, whereas markets anticipated the inflation rate to remain unchanged at 1.5%. The fall in the overall CPI was mainly driven by lower energy prices, as gasoline prices declined 14% in July from a year earlier, following the previous month's drop of 8.5%. Other data released by Statistics Canada showed a surprise fall in Canada's retail sales. The total value of sales at the retail level in Canada, excluding automobiles dropped 0.8% on a monthly basis in June, compared to May's downwardly revised 0.8% gain. Overall, retail sales decreased 0.1% in the first month of summer, following the preceding month's downwardly revised reading of 0.0%. The volume of sales declined in 7 of 11 categories, accounting for 54% of the industry. Meanwhile, analysts expected Canada's core retail sales and overall retail sales to grow 0.4% and 0.7% in June, respectively.
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