Canada May CPI Seen Rising 0.8% as Core Inflation Holds Near 2%
Updated
Updated · continuumeconomics.com · Jun 5
Canada May CPI Seen Rising 0.8% as Core Inflation Holds Near 2%
1 articles · Updated · continuumeconomics.com · Jun 5
Summary
0.8% monthly CPI growth is forecast for Canada in May, with analysts expecting a 0.6% rise excluding food and energy ahead of the June 22 release.
Energy is expected to drive most of the headline increase, while ex-food-and-energy prices rebound from flat April and a 0.1% March decline, helped by travel tours and air fares.
Core inflation gauges are seen mostly steady to softer: CPI-Median at 2.1%, CPI-Trim edging to 1.95% from 2.0%, and CPI-Common slipping to 2.4% from 2.5%.
April's annual CPI jump to 2.8% from 2.4% was largely attributed to the carbon-tax repeal dropping out of the comparison base, while underlying inflation slowed.
A return to economic growth in Q2 after two slight quarterly contractions could ease deflationary pressure, but the Bank of Canada's preferred core measures still point to contained inflation.