Canada’s inflation rate accelerated in April as rising gasoline prices pushed headline CPI higher, but softer core inflation measures suggest underlying price pressures remain more contained than feared. CPI rose 0.4% mom in April, below expectations of 0.7% mom, while annual inflation increased from 2.4% yoy to 2.8% yoy, undershooting the expected 3.1% yoy.
Energy prices were once again the dominant driver. Energy inflation surged from 3.9% yoy to 19.2% yoy, while gasoline prices accelerated sharply from 5.9% yoy to 28.6% yoy. Statistics Canada said part of the jump reflected the removal of the consumer carbon levy in April last year dropping out of annual comparisons, creating additional upward pressure on headline CPI. However, excluding gasoline, inflation actually cooled from 2.2% yoy to 2.0% yoy, pointing to easing price momentum across much of the broader economy.
The softer underlying trend was reinforced by Canada’s key core inflation measures, all of which slowed more than expected. CPI common eased to 2.5% yoy, CPI median fell to 2.1% yoy, and CPI trimmed slowed to 2.0% yoy. The data are likely to strengthen the Bank of Canada’s argument that the current inflation spike is largely an externally driven energy shock rather than a sign of renewed domestic inflation overheating, supporting expectations that policymakers will stay patient while assessing how persistent the oil-driven pressures ultimately become.
| Indicator | Previous | Latest | Expectation |
|---|---|---|---|
| CPI (mom) | — | 0.4% | 0.7% |
| CPI (yoy) | 2.4% | 2.8% | 3.1% |
| Energy Prices (yoy) | 3.9% | 19.2% | — |
| Gasoline Prices (yoy) | 5.9% | 28.6% | — |
| CPI ex Gasoline (yoy) | 2.2% | 2.0% | — |
| CPI Common (yoy) | 2.6% | 2.5% | 2.6% |
| CPI Median (yoy) | 2.3% | 2.1% | 2.2% |
| CPI Trimmed (yoy) | 2.2% | 2.0% | 2.3% |
