Leaving out gas prices, Statistics Canada said last month’s annual inflation number was 2.6 per cent. (Photo by THE CANADIAN PRESS)

Leaving out gas prices, Statistics Canada said last month’s annual inflation number was 2.6 per cent. (Photo by THE CANADIAN PRESS)

Lower gas prices slow annual inflation rate to Bank of Canada’s 2% bull’s-eye

OTTAWA — Canada’s price picture softened to two per cent last month following a sharp drop in gasoline prices compared to a year ago.

The annual inflation number for June hit the Bank of Canada’s ideal target as it came down from 2.4 per cent in May, Statistics Canada said Friday in a new report. It marked the first price deceleration after four straight months of year-over-year increases.

The result matched the expectations of economists, according to Thomson Reuters Eikon.

The neutral position of two per cent — right at the mid-point of the Bank of Canada’s range of one to three per cent — doesn’t put immediate pressure on governor Stephen Poloz to adjust his key interest rate.

Leaving out gas prices, Statistics Canada said last month’s annual inflation number was 2.6 per cent.

The 9.2 per cent drop in pump prices was partly due to rising inventory levels in the United States and Alberta’s elimination of its carbon pricing measures at the end of May, Statistics Canada said.

Energy prices fell in every province, with Alberta easily seeing the largest decrease compared to a year earlier.

In addition to weaker gas prices, consumers paid less last month for internet services, digital equipment and traveller accommodation.

Upward pressures on prices last month, compared with a year earlier, were led by a 17.3 per cent increase in the cost of fresh vegetables — the biggest acceleration since January 2016. The report said poor weather in farming regions helped drive up prices.

Consumers also shelled out more in June for auto insurance, mortgage borrowing costs, vehicle purchases and rent.

The average of Canada’s three gauges for core inflation, which are considered better measures of underlying price pressures by omitting volatile items like gasoline, decelerated slightly to 2.03 per cent, down from a revised 2.1 per cent the previous month.

By region, overall consumer prices last month rose at a slower pace in nine provinces, while British Columbia’s annual inflation rate was 2.6 per cent once again.

Last week, the Bank of Canada predicted overall inflation to drop temporarily in the third quarter of 2019 to 1.6 per cent as it reflects movements in gas prices, airfare volatility and the recent elimination countermeasures against U.S. steel and aluminum tariffs.

The central bank estimated inflation to be 1.8 per cent for the year before picking up its pace to about two per cent in 2020 and 2021.

inflation

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A 36-year-old Eckville man was sentenced in Red Deer provincial court to 18 years in prison and declared a long-term offender for abusing children as young as two.
Advocate file photo
Central Alberta pedophile sentenced to 18 years in prison and declared a long-term offender

Eckville man abused nearly a dozen children as young as two over nearly a decade

Sundre RCMP charged two people with drug trafficking. (File photo by Advocate staff)
$50,000 solar light tower stolen in 2019, recovered in Central Alberta

A solar light tower valued at over $50,000 was recovered by Wetaskiwin… Continue reading

Red Deer transit buses are returning to a regular half-hour schedule. (Advocate file photo).
Red Deer Transit returns to regular bus frequency

Buses will return to running every half hour on Wednesday

Prime Minister Justin Trudeau provides an update on the COVID-19 pandemic from Rideau Cottage in Ottawa on Tuesday, Jan. 11, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau vows to keep up the fight to sway U.S. on merits of Keystone XL pipeline

WASHINGTON — Canada won’t stop trying to convince U.S. president-elect Joe Biden… Continue reading

Justin Kripps of Summerland and his team have competed in Olympic action and World Cup competitions in bobsleigh. (Jason Ransom-Canadian Olympic Comittee).
QUIZ: Are you ready for some winter sports?

It’s cold outside, but there are plenty of recreation opportunities in the winter months

File photo
Wetaskiwin Crime Reduction Unit recovers valuable stolen property

Property valued at over $50,000 recovered by Wetaskiwin Crime Reduction Unit.

Karina Gould, Minister of International Development, holds a news conference on Parliament Hill in Ottawa on Thursday, Dec. 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
COVID-19 vaccines: Canadians torn between helping the world and helping themselves

MONTREAL — The COVID-19 vaccine rollout is highlighting the disconnect between the… Continue reading

A worker installs flags on Pennsylvania Avenue in front of the White House ahead of President-elect Joe Biden’s inauguration ceremony, Tuesday, Jan. 19, 2021, in Washington. THE CANADIAN PRESS/AP/David Phillip
‘Very mesmerizing’: Canadians eye Biden inauguration with relief, anxiety

Katie Thompson noticed a pattern emerging with appointments made at her chiropractic… Continue reading

Parliamentary interpreter Nicole Gagnon poses for a photo on Parliament Hill, Tuesday January 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Parliamentary hearings over Zoom an ongoing headache for translators

OTTAWA — Each day, translator Nicole Gagnon wakes up and heads to… Continue reading

People lineup at a hotel for the homeless before the 8 p.m. COVID-19 curfew on Jan. 11, 2021, in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Montreal mayor wants homeless exempted from curfew in wake of Innu man’s death

Montreal’s mayor is calling on the provincial government to exempt homeless people… Continue reading

Conservative MP Derek Sloan arrives at West Block Thursday December 3, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Tories unsettled over whether ends justifies the means in ouster of Derek Sloan

OTTAWA — Efforts to oust controversial Conservative MP Derek Sloan from the… Continue reading

Prime Minister Justin Trudeau listens to a question as he participates in a news conference at Rideau Cottage in Ottawa, Tuesday, Jan. 19, 2021. THE CANADIAN PRESS/Adrian Wyld
No Pfizer-BioNTech vaccine doses to be shipped to Canada next week: Fortin

OTTAWA — Canada is not going to get any vaccine does from… Continue reading

Prime Minister Justin Trudeau listens to a question as he participates in a news conference at Rideau Cottage in Ottawa, Tuesday, Jan. 19, 2021. THE CANADIAN PRESS/Adrian Wyld
Cancel foreign trips because travel rules could change suddenly, Trudeau says

OTTAWA — Prime Minister Justin Trudeau says any Canadian planning an international… Continue reading

Most Read