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Canadian Inflation Still On The Rise

James Boston
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Canadian Inflation Still On The Rise

Canada takes it’s turn today as the latest G7 economy to update markets on it’s price growth activity. Statistics Canada has just reported the headline Consumer Price Index (CPI) change for May as 2.3%, this year on year reading compares to April’s 2.0% and the market consensus of a 2.1% change. The month on month reading is now showing a change of 0.5%, this compares to the previous month change of 0.3%, markets had anticipate no movement from this 0.3% reading. Seasonally adjusted this month on month number holds at the 0.2% seen in April but beats a market expected level of 0.1%. The absolute index for the month now stands at 125.8, up from 125.2 in April and a tick above the consensus estimate of 125.7.

On a Core level, when excluding the volatile elements such as food and fuel, the CPI reading month on month is now at 0.3% in contrast to April’s 0.2% change. In addition to the Statistics Canada calculation, the Bank of Canada (BoC) also provide Core CPI readings using slightly differing calculation methodologies, the BoC readings are an important confirming statistic but are not generally given the same market credence as the headline Statistics Canada data. The BoC year on year reading for the month of May is now at 1.7%, this is up from April’s 1.4% and also beats the market consensus estimate of 1.5%. Month on month the BoC is show the inflation change to be 0.5%, economists had expected this to remain in line with the prior month’s 0.2% reading.

Retail sales growth for the month of April in Canada has just been published at 1.1% month on month, this compares to a shrinkage the prior month of -0.1% and markets had anticipate a positive change of 0.6% in April. The ex-Auto Retail Sales number is now showing at 0.7%, this is ahead of the prior month’s 0.1% growth and also tops the anticipated 0.3% figure.

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