It was not a Merry Christmas for Canadian retailers
December’s retail sales slump was the worst in seven years, however, the weak demand from consumers didn’t stop retailers from raising prices again (up +2% the past year). I think retailers are adjusting prices to reflect higher import costs, courtesy of a much depreciated Canadian dollar. Based on the hotter than expected core CPI (inflation) for January, it seems that adjustment didn’t end in 2015. If these pressures don’t ease, Canada’s next move may be to hike rates, not cut! Stay tuned.
