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  • Jan 21st, 2010
  • Comments Off on Canadian economic recovery still weak
Canada's economic recovery remained choppy in the fourth quarter, according to data that revealed a lack of inflationary pressure in December and a still-struggling manufacturing sector in November. Higher gasoline prices pushed the annual inflation rate to a 10-month high in December, Statistics Canada said on Wednesday. But the rate was below market forecasts and at the lower end of the Bank of Canada's target range of 1 percent to 3 percent.

In November, manufacturing sales disappointed with a scant 0.1 percent advance, compared with expectations for a 0.6 percent increase. The figures are unlikely to change the central bank's pledge to keep interest rates at record lows until at least the end of June this year. Annual inflation was at 1.3 percent, its highest level since 1.4 percent in February 2009, due largely to the effect of a steep decline in gasoline prices in December 2008. In November, annual inflation was 1.0 percent.

The consumer price index slipped 0.3 percent in December from November. Analysts had forecast a monthly decline of 0.2 percent in the CPI and a 12-month inflation rate of 1.5 percent. Core CPI, closely watched by the central bank, also came in slightly lower than expected with a decline of 0.3 percent in the month for an annual rate of 1.5 percent, below the market forecast of 1.7 percent. Manufacturing sales advanced less than expected in November from October as weakness in the automotive and aerospace sectors offset gains in most other industries.

Copyright Reuters, 2010


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