Inflation stays stable in May, reflecting slow economy
The Consumer Price Index rose 1.7% on a year-over-year basis in May, matching the 1.7% increase in April, Statistics Canada said.
Compared to the same month last year, slower paced increases to rent and a decline in travel tours put downward pressure on inflation this May.
“After last month’s uptick in core inflation some giveback was expected. The labour market remains soft and tepid domestic demand growth should keep a lid on inflationary pressures,” TD Director and Senior Economist Andrew Hencic said. “As has been the case this year, the outlook is heavily dependent on how trade negotiations evolve, but we believe that the soft economic backdrop should give the BoC space to deliver two more cuts this year.”