Canada’s inflation rate is cooling and bespoke measures of consumer price growth are also on the wane, bolstering the case for the Bank of Canada to start cutting interest rates this summer.
On a monthly basis, the CPI rose 0.5 per cent, largely because gasoline prices jumped by nearly 8 per cent in April from March. But outside of a couple problematic areas, consumer prices are broadly decelerating, an encouraging sign for central bankers. “Canadians look likely to get a small dose of rate relief in the coming weeks,” Royce Mendes, head of macro strategy at Desjardins Securities, wrote in a client note. With several measures of inflation in a downward trend, “Canadian central bankers should have the evidence they need to begin easing monetary policy.”Grocery prices rose at an annual rate of 1.4 per cent in April, down from 1.9 per cent in March. Meat prices rose 1.
In Alberta, for example, rents have soared by 16.2 per cent since April, 2023. Statscan said this increase has coincided with strong migration into the province. Excluding food and energy, the CPI rose by 2.7 per cent in April, year over year, compared with 2.9 per cent in March. On a three-month annualized basis, this measure of core inflation is running below 2 per cent.