Preview: Due May 19 - Canada April CPI - Stronger overall but with slower core rates
We expect April Canadian CPI to bounce to 2.9% yr/yr (2.94% before rounding) from 2.4% in March, most of the acceleration due to April 2025 having seen the abolition of a carbon tax, thus lowering the year ago base relative to March. We expect the Bank of Canada’s core rates to be on balance softer. For the core rates, above trend year ago data will lift the year ago base.
On the month we expect CPI to rise by 0.5% unadjusted, and by 0.4% seasonally adjusted. Ex food and energy we expect gains of 0.4% unadjusted and 0.2% seasonally adjusted. Gasoline prices continued to increase but the rise was modest compared with that seen in March.
The 0.2% seasonally adjusted ex food and energy gain will be a correction from a flat March, but trend does appear to have slowed significantly, with January and February having increased by only 0.1%. Air fares are at risk of feed through from energy gains, while clothing and telephone services are unlikely to repeat March declines.
We expect the yr/yr ex food and energy pace to slow to 1.8% from 1.9%, but this is not one of the BoC’s three core rates. With stronger data in April 2025 dropping out we expect CPI-Median to slow to 2.2% (2.15% before rounding) from 2.3% and CPI-Common to slow to 2.1% (before and after rounding) from 2.2%, thus getting close to the 2.0% target. We expect CPI-Common, which saw less of a bounce in April 2025, to remain at March’s stronger pace of 2.6%.
