Notes From the Desk – CAD CPI – An Unwelcome Surprise
The record-breaking heat in July (highest average global temperature ever recorded) spilled over into Canadian inflation, with CPI coming in hotter than expected.
By the numbers.
- YoY headline CPI: 3.3% (3% expected)
- YoY CPI trim: 3.6% (3.6% expected)
- YoY CPI median: 3.7% (3.7% expected)
Implications.
While base effects tied to gasoline prices contributed to the acceleration in headline CPI, the ‘stickiness’ of core inflation should continue to cause concern for the Bank of Canada (BoC). The September rate decision remains a close call, as the BoC balances a rising unemployment rate against a (so far) stubbornly high inflation rate.
