The Globe and Mail reports in its Wednesday edition that inflation cooled sharply in April, Statistics Canada said Tuesday, but there were signs of pressure building at the grocery store.
A Canadian Press dispatch to The Globe says the annual pace of inflation cooled to 1.7 per cent last month, down from 2.3 per cent in March. With a Bank of Canada interest-rate decision set for early June, market odds flipped in favour of another rate hold.
Canadians were primarily finding relief at the gas pumps in April.
Statistics Canada said gas prices fell 18.1 per cent year-over-year in April, thanks mostly to the end of the carbon price, but also because global oil prices fell amid declining demand and higher production from OPEC countries. While consumers found it cheaper to gas-up in April, pressure was building at the grocery store.
Prices for food rose 3.8 per cent last month, Statscan said, accelerating from 3.2 per cent in March. TD Bank senior economist Andrew Hencic said in a note that signs of a resurgence in core inflation might mean that the tariff hit could be showing up sooner than expected in the price data. Mr. Hencic said the April inflation report "complicates" the Bank of Canada's decision-making.
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