Canada: Inflation edges down in July
August 9, 2012
In July, consumer prices decreased a seasonally adjusted 0.1% over the previous month, which followed the 0.2% drop recorded in June. The monthly price fall mainly reflected a decline in prices for transportation as well as for clothing and footwear. As a result of the monthly decline, annual headline inflation fell from 1.5% in June to 1.3% in July, undershooting market expectations of a 1.5% increase. Currently, Canada's inflation remains within the Central Bank's target of 2.0% with a tolerance margin of plus/minus 1.0 percentage points. Meanwhile, annual average inflation inched down from 2.4% in June to 2.3% in July. Simultaneously, core inflation, which excludes volatile items such as gasoline and fresh food, fell from 2.0% in June to 1.7% in July. The Bank of Canada expects headline inflation to average 1.7% in 2012 and 1.8% in 2013.