“One month worth of data obviously does not make a trend, and what we’re seeing on balance since the summer of 2022, after the inflation rate peaked as high as 8.1%, [is] it’s still coming down, and that’s true in so many senses,” she said.
April’s inflation upswing was driven by multiple factors, with each of the Bank of Canada’s preferred core measures seeing an increase. While that’s a departure from the figures of recent months, it doesn’t unduly complicate the overall outlook, Fan said.
“What we’re seeing in April is definitely something that draws a lot of attention, especially given the upside surprise is not really coming from just one or two items. From our own tracking, it’s actually a bit more dispersed than we’d like to see,” she said.
“But on balance, it really doesn’t change the narrative that inflation still has been, as a whole, moderating and easing, and the pressure has been narrowing.”
The Consumer Price Index (#CPI) rose 4.4% year over year in April 2023, following a 4.3% increase in March. To learn more: https://t.co/pXYzXUC8C0. pic.twitter.com/ZNaxr9tmM2
— Statistics Canada (@StatCan_eng) May 16, 2023
What accounted for April’s rise in inflation?
Shelter contributed heavily to headline inflation increasing in April. Mortgage interest costs surged, rising by 28.5% on a yearly basis, while rent posted a 6.1% year-over-year spike. Still, Fan noted in RBC’s inflation write-up that the Bank of Canada’s recent pause on interest rate hikes should see those mortgage costs slow again.