Steady-as-She-Goes Canadian Economy Backs Cautious Rate Stance

Canada’s economy continues to show signs of strength, but not enough to fuel inflation and prompt aggressive rate hikes -- a scenario that validates the Bank of Canada’s cautious stance on monetary policy.

Inflation figures Friday by Statistics Canada showed few signs of any sharp pick-up in price pressures even as the economy operates near its full capacity and gasoline prices are rising. A separate retail sales report showed signs of life from consumers, who had been scaling back recently. The pair of releases adds to a run of data -- including an unexpected jump in both imports and exports -- that underscore demand remains solid.