The Consumer Price Index (CPI) rose by 2.7% in June on a year-over-year basis, showing a decrease from the 2.9% increase in May.
Statistic Canada says this slowdown is primarily attributed to a reduction in the growth rate of gasoline prices.
Here are the Key Highlights:
- Gasoline Prices:
- Year-over-year increase slowed to 0.4% in June from 5.6% in May.
- Monthly decrease of 3.1% in June.
- Influenced by OPEC+ announcement to phase out production cuts and refinery restarts.
- Durable Goods:
- Prices fell by 1.8% year-over-year in June, compared to a 0.8% decline in May.
- Notable decline in the purchase of passenger vehicles index by 0.4%.
- Used vehicle prices dropped by 4.5%.
- Furniture prices decreased by 3.9%, partly due to easing supply chain issues.
- Food Prices:
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- Year-over-year increase of 2.1% in June, up from 1.5% in May.
- Significant price growth in dairy products (+2.0%), fresh vegetables (+3.8%), non-alcoholic beverages (+5.6%), and preserved fruit (+9.5%).
- Fresh fruit prices fell by 5.2%, compared to a 2.8% decline in May.
Monthly Changes:
- Overall CPI fell by 0.1% in June after a 0.6% increase in May.
- Monthly decrease driven by lower prices for travel tours (-11.1%) and gasoline (-3.1%).
- Seasonally adjusted monthly CPI rose by 0.1% in June.
Regional Variations:
- Six provinces experienced a slower year-over-year price increase in June compared to May.
- Quebec saw a significant decrease in traveller accommodation prices (-20.2%), contributing to the overall slowdown.
The measures of core inflation, CPI-trim and CPI-median, which the Bank of Canada uses as one of the factors to determine the interest rate, are reduced at a lower rate and hover around 2.8% and 2.6%, respectively.
CPI-trim and CPI-median are core inflation measures that exclude extreme price changes. CPI-trim removes the outer 40%, while CPI-median focuses on the median price change.
The next scheduled date for announcing the overnight rate target is on Wednesday, July 24, 2024.