Canada's GDP Contracts 0.1% in May as Retail Sales Fall 1.1%, CPI Rises 1.9%, PPI and Core CPI Increase

Canada's recent economic data indicate a modest slowdown in growth and mixed inflation signals. The country's GDP contracted by 0.1% month-over-month in May 2025, matching forecasts and the previous month's decline, while the year-over-year GDP growth slowed to 1.2%, slightly below the prior 1.3% but above the estimated 1.1%. Retail sales showed volatility, with a 1.1% decline in July following smaller fluctuations in previous months. Core retail sales also fell by 0.2% month-over-month. Producer Price Index (PPI) data revealed a 0.4% increase month-over-month in July and a year-over-year rise of 1.7%, up from 1.2% previously. Consumer Price Index (CPI) figures showed a 0.1% increase month-over-month in July and a year-over-year increase of 1.9%, consistent with forecasts but higher than the previous 1.7%. Core CPI month-over-month rose by 0.3%. Manufacturing sales declined by 0.9% month-over-month in July, though this was an improvement compared to prior months. Overall, the data reflect a cautious economic environment with subdued growth and moderate inflationary pressures in Canada.