Croxon: Inflation is at an all-time low largely because of Big Tech
Canadian annual inflation decelerated in June after gasoline prices declined and customers paid less for internet services.
Annual consumer price inflation slowed to 2 per cent, from 2.4 per cent in May, Statistics Canada said Wednesday from Ottawa. The number matched analyst expectations. On a monthly basis, consumer prices fell 0.2 per cent in June, less than the 0.3 per cent median forecast.
Core inflation -- seen as a better gauge of underlying prices -- held steady around the Bank of Canada’s target. The average of the three measures ticked down slightly to 2 per cent, from 2.1 per cent in May.
Canada’s currency pared gains after the report and was trading 0.1 per cent higher at $1.3075 against its U.S. counterpart at 8:34 a.m. Toronto time.
- June’s inflation report brings the headline measure back in line with core readings, as expected, and will give the Bank of Canada confidence it can continue to hold rates steady, even as global peers move to an easing bias. The numbers suggest the environment for inflation is neither high enough nor soft enough to pull Governor Stephen Poloz off the sidelines.
- Underlying price pressures remains strong. There was an upward revision to the May reading for CPI-median, to 2.2 per cent from 2.1 per cent. The average of the May gauges was the fastest pace since 2012.
- In a separate report, Statistics Canada said manufacturing sales for May climbed 1.6 per cent, missing the 2 per cent median forecast in a Bloomberg survey of economists.
- Excluding gasoline, consumer prices quickened 2.6 per cent in June on an annual basis, down slightly from 2.7 per cent the month before. The statistics agency said prices in all eight major categories increased.
- Statistics Canada said gasoline prices fell 9.2 per cent in June due in part to falling oil prices, rising inventories in the U.S. and “the elimination of carbon pricing in Alberta at the end of May.
- On a monthly basis, consumer prices fell 0.2 per cent, slightly less than the 0.3 per cent analyst estimates.
--With assistance from Erik Hertzberg.