Inflation declines to lowest level since June 2023 in June

Inflation edged down to 3.0% in June, following May’s 3.3%. June's figure marked the lowest inflation rate since June 2023 and was below market expectations. The reading was largely due to more moderate price pressures for housing, energy and transport. The trend was unchanged, with annual average inflation coming in at May's 3.3% in June. Meanwhile, core inflation fell to 3.3% in June from the previous month's 3.4%. Lastly, consumer prices dropped 0.06% over the previous month in June, swinging from the 0.01% increase seen in May. June's result marked the sharpest fall in prices since May 2020.

On monetary policy implications, Desjardins’ Francis Généreux said: “After disappointing data in the first few months of 2024, price movements have been much more encouraging in the past two months, particularly in the services sector. But we shouldn’t expect the Fed to announce a rate cut in the immediate future. They’ll want to be sure that inflation continues to cool before making their move. We’re still calling for two rate cuts in 2024, probably close to the end of the year.”

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