Canadian inflation remains weak in September; Retail sales show no signs of rebound in August

Consumer prices in Canada grew less than expected last month amid lower fuel prices and milder increases in food prices, official data showed on Friday. According to Statistics Canada, the headline Consumer Price Index rose 0.1% month-over-month in September, surpassing August's drop of 0.2% but falling behind the 0.2% gain forecast. On an annual basis, consumer prices advanced 1.3% in September, missing the 1.5% rise forecast. Meanwhile, the so-called core CPI, which excludes some volatile price items, increased 0.2% in the same month, up from August's 0.0% reading and in line with analysts' expectations. On a yearly basis, core inflation, a closely watched indicator by the Bank of Canada, held steady at 1.8%, as projected. The drop in annual headline inflation was driven by a 3.2% decline in gasoline prices and sluggish food prices, which rose just 0.1%. Separately, Statistics Canada announced retail sales fell 0.1% in August, following July's revised 0.2% drop, while analysts anticipated a 0.5% increase. Moreover, core retail sales came in at 0.0%, compared to the preceding month's downwardly revised decline of 0.2%; however, markets projected a 0.4% sales increase in August. Analysts widely expect that the Canadian economy rebounded in the Q3, following the Alberta wildfires.