The Globe and Mail reports in its Saturday, May 21, edition that Statistics Canada reported Friday that retail sales sank 1 per cent in March, slipping back more than expected after two months of strong gains. The Globe's David Parkinson writes that a string of negative economic reports for March suggest the economy may have contracted for a second successive month. Statscan also released on Friday its April consumer price index, showing Canada's inflation rate jumped to 1.7 per cent from March's 1.3 per cent. More importantly, the Bank of Canada's core inflation measure unexpectedly rose to 2.2 per cent from 2.1 per cent in March, its highest reading in nine months. The BOC's interest rate policy is defined by pursuing a 2-per-cent inflation target. The CPI numbers are unquestionably an issue as the bank approaches its rate decision next Wednesday. Mr. Parkinson says the BOC will need to see more evidence than this before it moves inflation to the top of its list of worries, especially while the economic recovery remains halting. Under Governor Stephen Poloz, the BOC has been pretty consistently skeptical of inflation numbers in the absence of clear underlying capacity pressures from a growing economy.