Canadian headline inflation eased to 0.9 percent in March from February’s 2.2 percent. Adjusting for seasonality, consumer prices also fell 0.9 percent sequentially, the largest monthly fall since the series’ inception in 1992. Prices of energy mainly weighed in on the headline rate, falling 11.6 percent year-on-year, driven by a 21.2 percent fall in gasoline prices. Most other energy prices dropped with the exception of electricity, which rose marginally.
Other major components recorded a deceleration in price growth. Only household operations and alcohol, tobacco and cannabis products saw price growth accelerate in March. Meanwhile, the Bank of Canada's core inflation measures all slowed down in the month. CPI-common eased to 1.7 percent, whereas CPI-median and CPI-trim slowed down to 2 percent and 1.8 percent, respectively.
“The good news is that with signs that the virus curve is flattening, policy makers are now looking to gradually re-open economies in May. After two months of horrific data, we may finally be through the worst. Of course, this assumes that measures are removed slowly enough to avoid another increase in infections. Fingers firmly crossed”, said TD Economics in a research report.
