By Promit Mukherjee<\/p>\n
OTTAWA (Reuters) -Canada’s annual inflation rate eased to 1.7% in July from 1.9% in the prior month as lower year-on-year gasoline prices kept the consumer price index low, data showed on Tuesday.<\/p>\n
Economists also cheered the three-month average of the core measures, which eased to below 3% after several months, boosting hopes of a rate cut in September.<\/p>\n
Analysts polled by Reuters had forecast the annual inflation rate at 1.8% and the monthly inflation rate at 0.3%. The CPI increased by 0.3% in July from 0.1% in June on a monthly basis, Statistics Canada said.<\/p>\n
Gasoline prices dropped by 16.1% on a yearly basis in July, following a 13.4% decline in June. On a monthly basis the price of the fuel dropped as geopolitical tensions eased and crude oil-producing nations increased output.<\/p>\n
The elimination of a carbon levy on petrol purchases has helped bring down the cost of the fuel on a yearly basis and is expected to maintain downward pressure on the CPI basket for another eight months.<\/p>\n
The overall consumer price index has held below the mid-point of the Bank of Canada’s 1% to 3% target range, even as there are signs of rising prices of food.<\/p>\n
Excluding gasoline, the CPI rose 2.5% in July, StatsCan said.<\/p>\n
Core measures of inflation, which are closely tracked by the Bank of Canada, have remained resilient and hovered around the top of the bank’s preferred range of CPI.<\/p>\n
The share of the CPI basket which is above 3% continues to be elevated at over 37%, data showed.<\/p>\n
The average of the three months of annualized core measures slipped to 2.4% in July, the first time since September last year, said Doug Porter, chief economist at BMO Capital Markets.<\/p>\n
“If that more recent pace in core is maintained, and the economy remains soft, we believe that will eventually set the stage for BoC cuts,” he said, but cautioned the three-month annualized metric could swing wildly with one month of aberration in data.<\/p>\n
Money markets are betting the odds of a rate cut on Sept. 17 at 40%, up from 32% before the inflation data, after the bank has stayed put at 2.75% for its last three rate decision meetings.<\/p>\n
The Canadian dollar weakened and was trading down 0.23% after the inflation data. Two-year government bond yields were down 3.5 basis points to 2.704%.<\/p>\n
The main drivers of the increase in costs were a rise in food prices and shelter costs, StatsCan said. Food prices, which contributes close to 17% to the overall CPI basket, rose by 3.3% in July from 2.9% in June.<\/p>\n
Shelter costs, the biggest component of the CPI basket, rose 3% in July from 2.9% in June, marking the first increase since February last year.<\/p>\n
(Reporting by Promit Mukherjee; Editing by Dale Smith, Mark Potter and Franklin Paul)<\/p>\n","protected":false},"excerpt":{"rendered":"By Promit Mukherjee OTTAWA (Reuters) -Canada’s annual inflation rate eased to 1.7% in July from 1.9% in the…\n","protected":false},"author":3,"featured_media":159093,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[2440,64,13325,92327,79,34919,60354,17001,2439,67,132,68],"class_list":{"0":"post-159092","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bank-of-canada","9":"tag-business","10":"tag-consumer-price-index","11":"tag-core-measures","12":"tag-economy","13":"tag-gasoline-prices","14":"tag-inflation-rate","15":"tag-inflation-data","16":"tag-statistics-canada","17":"tag-united-states","18":"tag-unitedstates","19":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115056960056174002","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/159092","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=159092"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/159092\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/159093"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=159092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=159092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=159092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}