Sep 19, 2022
Inflation: Economists expecting slight cooldown
, BNN Bloomberg
Canada's inflation data expected tomorrow
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Economists are expecting to see a cooldown in Canadian inflation when Statistics Canada releases its latest data on Tuesday morning.
The downward trend would be a continuation from July's data when the annual inflation rate cooled to 7.6 per cent year-over-year. June's 8.1 per cent rate was the highest in nearly four decades.
The downward trend would be a continuation from July's data when the annual inflation rate cooled to 7.6 per cent year-over-year.
“We’re looking for the 12-month rate to drop, but there’s not really much relief in that, because much of it comes from softer gasoline prices,” Avery Shenfeld, the chief economist at CIBC Capital Markets, said via email to BNN Bloomberg.
While lower gasoline prices are expected to bring down headline inflation, Shenfeld noted that he still expects the core consumer price index (CPI) to remain above the Bank of Canada’s two-per cent target rate for the next little while.
“When you exclude food and energy costs from the CPI, we don’t see core inflation dropping below three per cent until the latter half of 2023,” he said.
South of the border, a higher than expected inflation number triggered warning signs for Royce Mendes, the managing director and head of macro strategy at Desjardins.
“All eyes will be on whether Canadian data will follow that disturbing path,” he said.
While Mendes doesn’t expect Canadian CPI to run as hot as it did in the U.S., he does expect it to be high enough to warrant continued action from the Bank of Canada.
“The BoC will need to continue with its aggressive rate hiking cycle,” he stated.
The downward trend would be a continuation from July's data when the annual inflation rate cooled to 7.6 per cent year-over-year. June's 8.1 per cent rate was the highest in nearly four decades.
The downward trend would be a continuation from July's data when the annual inflation rate cooled to 7.6 per cent year-over-year.
“We’re looking for the 12-month rate to drop, but there’s not really much relief in that, because much of it comes from softer gasoline prices,” Avery Shenfeld, the chief economist at CIBC Capital Markets, said via email to BNN Bloomberg.
While lower gasoline prices are expected to bring down headline inflation, Shenfeld noted that he still expects the core consumer price index (CPI) to remain above the Bank of Canada’s two-per cent target rate for the next little while.
“When you exclude food and energy costs from the CPI, we don’t see core inflation dropping below three per cent until the latter half of 2023,” he said.
South of the border, a higher than expected inflation number triggered warning signs for Royce Mendes, the managing director and head of macro strategy at Desjardins.
“All eyes will be on whether Canadian data will follow that disturbing path,” he said.
While Mendes doesn’t expect Canadian CPI to run as hot as it did in the U.S., he does expect it to be high enough to warrant continued action from the Bank of Canada.
“The BoC will need to continue with its aggressive rate hiking cycle,” he stated.
