|Inflation down in April |
|Inflation settled last month here in Canada, according to figures released this morning by Statistics Canada.
The agency said the unadjusted all-items Canadian CPI index fell 0.2% in April bringing the annual inflation rate down to 0.4% from 1.0% in March. On a seasonally-adjusted basis, consumer prices fell 0.4%. The Bank of Canada's core measure posted a slightly less than expected 0.1% gain in April on an unadjusted basis with the seasonally-adjusted index held steady. Relative to a year earlier, the Bank's core rate slipped to 1.1% from 1.4% in March.
In the month of April, prices for gasoline fell by 2.8%; clothing dipped by 1.7%, with food from restaurants, furniture and mortgage interest costs also lower in the month. These declines were partially offset by rising prices for electricity, air transportation and footwear. Relative to a year earlier, gasoline prices were down 6.0% and mortgage interest costs and video equipment fell 4.3% and 10.9% respectively.
Clothing prices stood 1.5% higher than the same period in 2012 as did food prices. Excluding gasoline, the CPI was 0.8% higher than in April 2012.
In its April Monetary Policy Report, the central bank acknowledged that the inflation rates were likely to remain below the 2% target until mid-2015 as the economy's excess slack is absorbed and the impact of one-off factors dissipate.
The upcoming report on first quarter growth will be looked at to validate this expectation. Experts at RBC forecast that the economy grew at a 2.3% annualized pace in the first quarter, slightly faster than the economy's potential rate which the Bank of Canada pegged at 2.1%