Canada’s consumer price inflation decelerates in June

Canada’s consumer price inflation slowed in June, coming in slightly weaker than consensus expectations. The nation’s headline inflation decelerated to just 1 percent year-on-year in June from May’s 1.3 percent. Consensus expectations was for 1.1 percent. On a sequential seasonally adjusted basis, prices remained flat in June. Goods pulled down inflation again in June. Goods prices dropped 0.5 percent year-on-year, the biggest drop in more than two years. Meanwhile, services inflation accelerated 2.4 percent year-on-year in June from May’s 2.3 percent.

Dropping energy and passenger vehicle prices were a drag on the headline figure, while food prices added to inflation for the first time in nine months. Two of the Bank of Canada’s three core measures rose on the month. CPI-median accelerated to 1.6 percent from 1.5 percent, while CPI-common rose 1.4 percent from 1.3 percent. CPI-trim stayed the same at 1.2 percent.

The BoC’s decision to hike the overnight rate last week cited temporary factors restraining price growth. These were clear in June with gasoline, electricity and passenger vehicle prices all being a drag on the headline number, noted TD Economics.