Canada Inflation Research Brief

Unexpected uptick in inflation. Canada’s consumer price inflation surprised on the upside in April, with the 12-month growth rate reaching 4.4 per cent compared to the market consensus of 4.1 per cent. Following a 4.3 per cent increase recorded in March, this also marked the first month of price growth acceleration since inflation peaked in summer 2022. Mortgage interest costs and rent were the top upward contributors for this headline CPI increase, which grew at 28.5 per cent and 6.1 per cent year-over-year, respectively. Due to OPEC+ announcing oil production cuts, gasoline prices advanced 6.3 per cent month-over-month, which slowed the pace of decline in energy costs on an annual basis. Looking at the sequential trend, CPI-median and CPI-trim regained momentum on a three-month annualized basis as well, despite a continued 12-month decrease.