Consumer Prices (Aug.) & Retail Sales (Jul.)

The decline in the Bank of Canada’s preferred measure of core CPI inflation to a two-year low of 1.8% in August, from 2.1%, shows that the upward pressure on prices from last year’s slump in the dollar is now beginning to fade. At the same time, however, the modest 0.3% m/m rise in retail sales volumes in July means that GDP is still on track for a decent rebound in the third quarter, which should ease any immediate worries the Bank has about the economy’s health.