Toronto-Dominion Bank T.TD

Desjardins Take: CPI Canada

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Desjardins Says The New Year Brings Some Early Signs of A New Trend in Canada's CPI

 

21 Feb 2023 09:16 ET

09:16 AM EST, 02/21/2023 (MT Newswires) -- The Canadian consumer price index (CPI) Tuesday rose just 0.5% month-over-month in January, noted Desjardins.

That was cooler than what the consensus had penciled in and left the 12-month rate tracking 5.9%, four ticks slower than the 6.3% y/y seen in December, said the bank. Rising gasoline prices and ongoing increases in food prices drove CPI higher in January.

However, excluding those two volatile components, prices rose just 0.14% in seasonally-adjusted (SA) terms, pointed out Desjardins. That's the softest print since early 2021 and leaves the three-month annualized pace of core inflation running at just 3.1%.

The three-month annualized rates of the Bank of Canada's (BoC) core median and trim measures now both stand at 3.5% y/y. That's at the low end of the recent range for those "supercore" measures of inflation, added Desjardins.

The softer-than-anticipated data will reinforce the BoC's conditional commitment to keep rates on hold, according to the bank.