Rosenberg Research Notes An "Encouraging" CPI Report in Canada

11:13 AM EDT, 08/20/2025 (MT Newswires) -- There were no surprises in Canada's CPI report for July, released on Tuesday, with the non-seasonally adjusted number printing at 0.3% month over month, which was expected, while it was just 0.1% on a seasonally-adjusted basis, said Rosenberg Research.

The year-over-year trend eased to 1.7% from +1.9% in June, while the consensus was 1.8%year over year, and the core measures were also "tame," even if at the high end of the Bank of Canada's 1%-3% comfort band -- the trimmed core index stayed the same, at 3.0% year over year, and came in slightly below the consensus of +3.1%, noted Rosenberg Research.

Nothing here to settle the debate on what the BoC will end up doing or when, though Rosenberg still believes that there isn't enough in the way of policy easing priced into the markets.

Together with the headline employment decline in July and evidence of a widening output gap and moderating wage growth, Rosenberg strongly feels the BoC should move to cut again at the next meeting in September.

What the Bank should like quite a lot was that the core excluding food & energy index came back below 0.1% month over month after a three-month bump, it added. That is "encouraging."

The same for the key CPIX, which excludes the eight most volatile items and indirect taxes, which came in nearly flat after a three-month diet of hefty increases. The median CPI was tame as well, coming in at 0.2% month over month for the third month running -- a critical number for the BoC, which has lately been monitoring dispersion metrics very closely.

The CPIX core inflation rate is running at 2.6% year over year. The core excluding food & energy inflation rate is at 2.4%. The CPI excluding mortgage interest pace is at 1.5%. The excluding shelter index is running at 1.2%.

For all the trade and tariff talk, goods sector inflation is almost flat at 0.3% year over year. Whatever service sector inflation Canada is seeing is coming from residential rents (+5.1%) and property taxes (+6.0%), according to Rosenberg.

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