Canada March CPI - Correction lower led by travel costs
March Canadian CPI in falling to 2.3% yr/yr from 2.6% is significantly weaker than expected. Lower prices for gasoline and travel tours were cited as negative influences, the latter surely impacted by the unwillingness of Canadians to travel to the USA. The BoC core rates are on balance slightly softer.
CPI-median was unchanged at 2.9%, CPI-trim slipped to 2.8% from 2.9% and CPI-common fell to 2.3% from 2.5%. This corrects accelerations in January and February. While this will provide some relief to the BOC the probability of the BoC easing at tomorrow’s meeting is still quite low.
On the month CPI rose by 0.3% overall unadjusted with a 0.2% increase ex food and energy, with a rise in food outweighing a fall in energy. Seasonally adjusted the data looks soft, unchanged overall and -0.1% ex food and energy.
Prices for travel tours fell by 8.0% on the month while air travel, while up on the month was increasingly negative on a yr/yr basis. Strength in food prices was in part due to increased prices at restaurants following the end of a sales tax holiday.
