Canada's Consumer Price Growth "Cool" in June, But Core Measures of Inflation Not as "Mild," Says Desjardins

09:15 AM EDT, 07/15/2025 (MT Newswires) -- The Canadian headline consumer price index rose just 0.1% month-over-month non-seasonally adjusted in June, leaving the annual rate accelerating to 1.9% due to base effects, noted Desjardins after the release of Tuesday's CPI data.

The share of components rising faster than 3% year-over-year remained steady at 40%. Excluding food and energy, though, prices were up 0.3% on the month in seasonally-adjusted terms. More importantly, the monthly average of the Bank of Canada's preferred core measures accelerated to 0.3% from 0.2% in May, stated Desjardins.

As a result, the average of the three-month annualized rates for those metrics now stands at 3.4%, up from 3.0% in May.

There was some evidence of tariffs pushing up consumer prices in June, pointed out the bank. Clothing and personal care goods prices rose "significantly," as did furniture prices. Auto prices also rose again, although not as much as they did in the prior two months.

That said, there was strength observed in services too, with core services excluding shelter prices rising 0.3%.

Overall, price growth was relatively broad-based, with the distribution across categories fairly normal, added the bank.

In combination with the surprising strength in employment, the June inflation data suggest that the Bank of Canada will likely remain on the sidelines later this month, according to Desjardins. That said, the bank still expects slower population growth, mortgage renewals and weak business investment to lead the BoC to resume its rate-cutting cycle in September.

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