PRODUCER PRICES IN CANADA CONFIRM DEFLATIONARY TREND

Canada’s industrial product price index (IPPI), which is similar to the U.S.’s producer product index (PPI), surprised to the down side, falling 0.5% in September versus market expectations of a 0.2% decrease. Since May of this year, the month-over-month trend in IPPI has been very volatile, going up one month then reversing course the next month, so it is difficult to find a trend with these monthly gyrations. Of the 21 major groups, over 85% were either down or flat on the month and a measly 15% (or just three groups) managed to eke out an increase. Again, this attests to our deflationary and hence income-heavy tilt to our investment strategy.

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