Canada PPI unlikely to wake hawks
Producer prices in Canada fell by 0.1% in January after a cumulative drop of 2.9% in the previous three months. Prices are now 2.9% lower than a year ago, picking up the pace of decline.
Looking through all these large swings since the start of the pandemic, the PPI has shown a typical annual growth rate of 4% over these four years, above the average of 2.3% since 2000 but close to the average rate for the whole observation period since 1956.
The raw commodity price index was up 1.2% for the month, but that shouldn't worry the Bank of Canada’s hawks, as the index had lost 12.5% in the previous three months. In January last year, prices were down 6.4%. The average annual increase since the start of 2020 is a more impressive 8%, compared with an average of 5.3% since 2000 and 3.7% since 1981.
Canada's equally important CPI data will be released on Tuesday. The annual rate is expected to slow from 3.4% to 3.2% for the headline index and from 2.6% to 2.5% for the core index.
Author
Alexander Kuptsikevich, a senior market analyst at FxPro, has been with the company since its foundation. From time to time, he gives commentaries on radio and television. He publishes in major economic and socio-political media.
