Canada: Inflation ticks down in June
Consumer prices fell a seasonally-adjusted 0.1% from a month earlier in June, contrasting May’s 0.3% rise. According to Statistics Canada, the decrease was mostly driven by lower prices for transport, and recreation and education.
Inflation edged down to 2.0% in June (May: 2.4%), on lower prices at the pump, matching market analysts’ projections and consequently landing at the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation also softened marginally to 2.1% in June (May: 2.2%).
That said, inflation average notably higher in Q2 this year relative to the first quarter, likely the result of the carbon tax implemented at the start of the second quarter and a tight labor market. Going forward, inflation will likely remain within the Bank’s target range, supported by healthy labor market dynamics. Developments in oil markets remain a key risk to the inflation outlook.