Today’s economic data suggest inflation remains dormant, but economists are not taking the bait, nor do they expect the bank of Canada to fall for it either.

If petroleum and coal product prices had been excluded, the IPPI would have decreased 0.6% instead of declining 1.5%. Also, manufacturers paid 5.7% less for their raw materials than they did in April last year, the ninth consecutive year-over-year decline.

Also, in March, average weekly earnings for all employees were virtually unchanged from February. Employees on payrolls increased by 27,000, although employment growth would have been substantially higher if not for the Ontario public service strike that reduced employment in public administration by approximately 30,000.

Canadian industrial product prices grew by a less-than-expected 0.1% in April — the smallest monthly increase so far this year, notes BMO Nesbitt Burns. “Declining prices for lumber, food, and autos offset a 4.3% burst in petroleum prices,” it says. “On a year-over-year basis, prices were down 1.5% in April, the seventh consecutive decline. Ex petroleum, industrial prices fell by 0.2% in April and 0.6% from last a year ago.”

RBC Financial says that the numbers reveal that weak pricing conditions continue to exist for Canadian businesses. “Industrial prices may be stabilizing, posting a small 0.1% gain over the previous month but still a 1.5% decline in year-over-year terms. This monthly gain, however, was overwhelmingly due to the petroleum and coal products industries as prices in most other sectors remained virtually flat. Businesses paid 1.1% more in April over March for raw materials, particularly for mineral fuels and ferrous materials.”

Raw material prices rose by 1.1% in April, also slower than expectations, and have been down year-over-year for nine months.

In a separate release, average weekly earnings for March rose by a lower-than-expected 1.9%. RBC says that the rise in average weekly earnings are barely keeping pace with CPI inflation over the past month.

“Canadian industrial product prices continue to show little pipeline inflation pressures and a continued lack of corporate pricing power. As well, wage inflation remains on the sidelines,” notes BMO Nesbitt. “Even so, the Bank of Canada is concerned about potential inflation far down the road, and is unlikely to be deterred from its tightening path by this benign report.”