Ottawa, Canada (4E) – The core inflation rate in Canada surprisingly dropped in July for the first time in five months, and the headline figure slowed down faster than anticipated.
The consumer price index (CPI) jumped 2.1 percent year-on-year from 2.4 percent in June, driven by lower price of gasoline and automobiles, according to Statistics Canada report released Friday.
The key core CPI, which excludes prices of food and energy, slowed to 1.7 percent from 1.8 percent. The Bank of Canada uses the number to measure underlying inflation.
Analysts had expected the core measure to gain 1.9 percent and the CPI to slow to 2.2 percent, according to a Royal Bank of Canada report.
The slower pace of inflation appears to confirm the assertion by Bank of Canada that consumer prices are temporary.
Total CPI fell 0.2 percent month-on-month after a 0.1 percent gain in June, and the core measure stayed flat with a 0.1 percent decline.
Total monthly CPI dropped 0.1 percent on a seasonally adjusted basis, the first drop since last October, and the core rate was down to 0.1 percent from 0.2 percent in June.