Tuesday, July 16, 2024

Canadian Economy Remains Resilient as Inflation Falls

The Canadian Consumer Price Index (CPI) rose 2.8% year over year in June, following a 3.4% increase in May. While deceleration was fairly broad-based, another base-year effect in gasoline prices led to a slowdown in the CPI. Excluding gasoline, headline inflation would have been 4.0% in June, following a 4.4% increase in May.

Canadian Economy Remains Resilient as Inflation Falls

Canadians continued to see elevated grocery prices (+9.1%) and mortgage interest costs (+30.1%) in June, with those indexes contributing the most to the headline CPI increase. The all-items excluding food index rose 1.7% and the all-items excluding mortgage interest cost index rose 2.0%.

On a monthly basis, the CPI edged up 0.1% in June, following a 0.4% gain in May. After contributing to the increase in May, travel tours put downward pressure on the monthly all-items index in June. On a seasonally adjusted monthly basis, the CPI also rose 0.1%.

Chart 1