Canada Inflation Rate at 4-Month High of 2%

The annual inflation rate in Canada edged up to 2 percent in April 2019 from 1.9 percent in the prior month, matching market expectations. It is the highest inflation rate since December, driven by prices of shelter and transportation.
Statistics Canada | Luisa Carvalho | 5/15/2019 2:56:22 PM
Year-on-year, main upward pressure came from prices of shelter (2.7 percent, the same rate as in March) and transportation (2.5 percent vs 1.9 percent), as downward pressure from gasoline lessened (-1.6 percent vs -4.4 percent). Also, cost was higher for recreation, education and reading (1.8 percent vs 0.2 percent) and health and personal care (0.7 percent vs 0.2 percent) 

On the other hand, inflation slowed for food (2.9 percent vs 3.6 percent), primarily driven by a decline in the fresh or frozen beef index (-0.8 percent); clothing & footwear (1 percent vs 1.5 percent) and alcoholic beverages, tobacco products and recreational cannabis (2 percent vs 3 percent). In addition, prices fell for household operations, furnishings and equipment (-0.1 percent vs 0.5 percent).

Regarding special aggregates of the CPI, prices of durable goods rose 1.3 percent, up from a 1.2 percent increase in the prior month; and cost of services accelerated to 2.4 percent following a 2.2 percent gain in March, with the travel tours index rising 8.4 percent compared with April 2018. The increase was partly attributable to the fact that the first two days of the Easter long weekend, a popular time for travel, took place in April this year. Air transportation prices (+6.6 percent) continued to rise, amid jet groundings and increased April holiday travel. Also, the price of energy products rebounded (0.7 percent vs -1.2 percent).

On a monthly basis, consumer prices went up 0.4 percent, after a 0.7 percent gain in March and in line with market expectations. Monthly inflation was led by a 10 percent rise in gasoline prices largely due to a new carbon tax being implemented in New Brunswick, Ontario, Manitoba, PEI and Saskatchewan, while British Columbia hiked its existing carbon tax.

The BoC's annual core inflation, which excludes volatile items, dropped to 1.5 percent in April from 1.6 percent in the previous month and below market expectations of 1.8 percent.

Canada Inflation Rate at 4-Month High of 2%