Analysts at NBF point out that the average of the three core measures stands in line with the mid-point target of the Bank of Canada at 2.0% on an annual basis.
“Headline CPI declined in June as gasoline prices dropped a massive 8.0%, the sharpest pullback on record for that month. That said, other categories also contributed to June’s weakness as shown by CPI excluding food & energy rising a modest 0.08%, following a 0.31% surge in May.”
“However, it is worth noting that the recent momentum is much stronger. Our in-house replications of CPI-Trim and CPI-median rose over the past 6 months at 2.4% and 2.5%, respectively.”
“This is the strongest pace for the first six months of the year since 2008.”