MNI DATA ANALYSIS:Inflation, Retail Sales Beat Expectations>

By Yali N'Diaye

     OTTAWA (MNI) - The pace of inflation accelerated to 2.1% in 

November from 1.4% in October on a 12-month basis, Statistics Canada 

reported Thursday.

     This was slightly above analysts' expectations in a MNI survey, 

which had centered on a 2.0% gain, and was the largest increase since 

January 2017. 

     On a monthly basis, unadjusted CPI rose 0.3%, slightly above 

expectations of a 0.2% increase. 

     Statistics Canada also reported strong retail sales in October, 

with a monthly increase of 1.5% that was a full point above analysts' 

expectations in a MNI survey. Excluding autos and parts, sales also 

topped expectations with a 0.8% increase, while analysts had expected a 

0.3% gain. 

     --CORE INFLATION UP 

     On the inflation front, while a jump in gasoline prices - 7.4% on 

the month and 19.6% on the year - was the main positive contributor, 

measures of underlying inflation also edged up, with one even 

approaching 2.0%. 

     CPI-median rose 1.9%, CPI-trim was up 1.8%, both the highest rates 

since October 2016. CPI-common rose 1.5%, down from 1.6% in October. 

     The overall range went to 1.5%-1.9% from 1.5%-1.7%, lifting the 

average to 1.7% from 1.6%. 

     Excluding food and energy, total CPI was unchanged on the month and 

was up 1.8% year-over-year, sharply up from 1.4% in October. 

     The 12-month CPI rate increased in seven of eight major components, 

led by transportation (+5.9%) and shelter (+1.2%). 

     On a seasonally adjusted basis, CPI rose 0.5% on the month after 

edging up 0.2% in October, with all major components up except health 

and personal care. 

     Excluding food and energy, however, Canada's CPI continued to 

increase at a steady pace of 0.2%. 

     --STRONG RETAIL VOLUMES 

     On the activity front, retail sales surprised on the upside with a 

1.5% monthly gain, supported by a 1.4% increase in volumes. 

     Overall details of the report were robust, with sales widespread 

across regions and sectors, starting the fourth quarter on a strong 

footing. 

     Seven of 11 subsectors recorded higher sales, led by a 3.3% gain in 

autos and parts, the largest since February 2016, supported by a 3.0% 

increase in volumes. 

     Gasoline receipts decreased 0.6% on the month. Sales excluding 

gasoline rose 1.7%. 

     Regionally, sales increased in all provinces. 

     --MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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