Gasoline pushes up inflation, core pressures remain; June data may show a turning point
- The rise in gasoline prices became the main driver pushing up Canada's May CPI. Even after excluding this factor, core CPI still increased by 2.2% year-on-year.
- Gasoline prices themselves surged by 33.2% year-on-year in May, higher than April's 28.6%. However, this trend has now reversed, and data for June are expected to fall significantly.
- The increase in oil prices has triggered secondary effects. In May, airline transport prices rose by 7.4% year-on-year, compared to a 1.7% year-on-year decrease in the previous month, and grew by 6.7% compared to April.
- Housing costs continue to act as a drag. The replacement cost for owner-occupied housing fell by 2.5% year-on-year and by 0.3% month-on-month, becoming the main restraining factor in the inflation data.
- Overall, energy prices significantly pushed inflation higher in May, but core pressures remain. With gasoline price trends reversing, the market is watching to see if June's data can ease inflation concerns.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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