Canadian inflation decelerated to 2.8% year-over-year in June, from 3.4% in the prior month and two ticks below the consensus estimate . While the deceleration was largely due to gasoline prices today being compared to the very peaks seen in 2022, there were also some encouraging signs of weakening price pressures elsewhere as well. Seasonally adjusted prices excluding food/energy rose by a mere 0.
That said, despite signs of sticky underlying inflationary pressures and resilience in economic activity indicators, the Bank of Canada has given itself a long time to reach the 2% target. Core inflation metrics weren’t quite as encouraging. The BoC’s favoured measures, Median and Trim, both slowed a tick on a yearly basis to modestly below 4%. However, on a 3-month annualized basis, the Median was steady at 3.6% and the Trim actually accelerated to 4%. Just to make things a bit more convoluted, the other core measures showed some slowing. Canada’s old core, CPIX, slowed half a point to 3.2% y/y, while the 3-month annualized rate slipped to 2.7%. And, CPI ex.