Canada: Strong core inflation in 2019 – NBF


The Consumer Price Index in Canada rose 2.0% in April from a year ago. Matthieu Arseneau, an analyst at the National Bank of Canada, explains that underlying inflation took a breather in April. 

Key Quotes:

“In seasonally adjusted terms, CPI was up 0.3% m/m with rises in shelter, household operations, clothing, transportation, healthcare and alcohol/tobacco/cannabis while food and recreation were flat.”

“Headline CPI rose significantly for a third consecutive month as gasoline prices rose 10% in April. From January to April, the 25% rise in gasoline prices contributed to the 6 ticks jump in headline annual inflation now standing at slightly above the midpoint target of the central bank. Underlying inflation took a breather in April based on our replication of the Bank of Canada’s preferred core measures showing flat prints on the month.”

“It is worth noting that this follows strong rises in the first three months of the year. As a result, CPI-Trim and CPI-median are rising at an annualized clip of 2.2% and 2.3% respectively on a year-to-date basis. That is the strongest pace of growth in the current expansion.”

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