- Capital Economics
Canada's annual inflation cooled in February after hitting a fresh high in the prior month, as sharp drops in energy and gasoline prices offset increases in fruits and vegetables. The cost of living in Canada climbed at an annualized rate of 1.4% last month, down from 2.0% in January, Statistics Canada reported. Gasoline prices plummeted a whopping 13.1% year-over-year and 6.9% from January. If gasoline prices are excluded from the calculation, the inflation rate would be 1.9%. Nevertheless, food prices were one of the biggest drivers keeping the inflation rate up. Consumers paid 3.9% more for food last month compared with February 2015. Economists had predicted Canada's overall inflation rate to come at 1.5% and core inflation to be 2.0% last month.
A separate report showed unexpectedly strong retail sales in January, driven by motor vehicle and parts dealers. Retail sales surged 2.1% to $44.2 billion in the reported month, compared with $43.2 billion in December. The motor vehicle and parts dealers made up about one-quarter of January's retail sales, soaring 4.8% from December to $11.6 billion the following month. Meanwhile, core retail trade, which excludes automobile and parts sales, increased 1.2%, also beating the forecast of 0.4%.
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