Friday, February 22, 2013

Canadian Retail Sales and Consumer Price Inflation

Canadian retail sales declined 2.1 per cent in December, following five consecutive monthly increases. The majority of the decline was sparked by a dip in motor vehicle sales. Excluding motor vehicles sales, retail sales were down 0.9 per cent in December. Canadian retail sales growth for all of 2012 was just 2.5 per cent, half the rate of growth in 2011.

Retail sales in British Columbia fell 0.9 per cent in December and were 0.2 per cent lower year-over-year. For all of 2012, retail sales grew just 2.2 per cent, the weakest sales growth since the 2009 recession in spite of strengthening fundamentals like full-time employment and wage growth.

Weak retail sales point to fairly weak economic growth in both Canada and BC at the end of 2012, which has meant very little upward pressure on inflation. Canadian CPI registered just 1 per cent in January matching the increase in the Bank of Canada's core inflation index. 

copyright BCREA - reprinted with permission

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