Monthly data for inflation in Quebec and Canada – October 2024

In October, annual CPI growth in Quebec accelerated to 1.6% (+1.3% in September). The housing component remains the main contributor to inflation in Quebec, with an increase of 5.4% in October. Excluding the housing component, the CPI rose by just 0.3% in October in Quebec.

In Canada, the annual inflation rate stood at 2.0% in October, up on September (+1.6%). Gasoline prices accounted for most of the acceleration in inflation, rising by 0.7% in October.

The acceleration in inflation in October does not alter expectations that the Bank of Canada will lower its key rate again at its next announcement on December 11. After opting for a 50-point cut in October, we expect the Bank of Canada to return to a 25-point rate.

Please note this publication is only issued in French.

Monthly data for inflation in Quebec and Canada – September 2024

In September, annual CPI growth in Quebec continued its downward trend, settling at 1.3% (+1.5% in August).

In recent months, price growth has slowed further in the discretionary goods and services categories, a sign that rising interest rates have had the desired effect of curbing consumer demand.

In Canada, the annual inflation rate fell sharply over the month to 1.6% (+2.0% in August), mainly due to the year-on-year decline in gasoline prices (-10.7%). The continued slowdown in inflation in September confirms that the Bank of Canada (BoC) will continue to lower its key rate at its next announcement on October 23, although uncertainty remains as to the extent of the cut. In our view, the performance of recent economic statistics, particularly in the labor market, suggests that the BoC should instead favor a 25-point cut in its key rate.

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Monthly data for inflation in Quebec and Canada – August 2024

In August, annual CPI growth in Quebec fell sharply to 1.5%, down 0.8 p.p. on July (2.3%). Inflation in Quebec thus reached its lowest level in over three years, since January 2021. Half of the main goods and services categories making up the CPI showed a decline in prices over 12 months. Overall, however, gasoline prices made the biggest contribution to the slowdown in price growth over the month.

In Canada, the annual inflation rate continued to fall in August, settling at 2.0% (+2.5% in July). The tightening of the Bank of Canada’s monetary policy has thus paid off, with price growth in Canada back on target at 2% two and a half years after the start of policy rate hikes. Inflation statistics for August confirm that the Bank of Canada should continue to lower its key rate at its next announcement on October 23.

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Monthly data for inflation in Quebec and Canada – July 2024

In July, annual CPI growth in Quebec stood at 2.3%, up slightly on June (+2.2%). As in the rest of Canada, the housing component remains the main contributor to inflation in Quebec, with an increase of 6.6% in July. Excluding housing, price growth in Quebec was just 0.8% in July, reflecting the fact that rising interest rates had the desired effect of dampening consumer demand.

In Canada, inflation slowed again in July, coming in at 2.5% year-on-year (+2.7% in June). The slowdown in Canadian inflation marks the seventh consecutive month in which price growth has been within the Bank of Canada’s target range of 1% to 3%. In a sign that inflationary pressures have largely dissipated, 29% of the CPI basket of goods and services posted price increases in excess of 3% in July, a proportion in line with historical norms.

In this sense, July’s inflation statistics should give the Bank of Canada the green light for a further cut in its key rate at its September 4 announcement. Indeed
he decline in inflationary pressures is taking place against an economic backdrop marked by a labor market that has stagnated in recent months, particularly in the private sector. A further rate cut would be in line with the Bank’s recent communications to the effect that members of the Governing Council are increasingly concerned about the signs of weakness in the Canadian economy.

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Monthly data for inflation in Quebec and Canada – June 2024

In Quebec, annual CPI growth fell sharply in June to 2.2% (+3.1% in May), hitting a new low since prices began to rise in winter 2021. Quebec’s inflation rate also fell below the Canadian average (+2.7%) for the first time in almost two years.

After a brief acceleration in May, the Canadian inflation rate (+2.7%) fell again in June, in line with the overall trend observed since the start of the year. Price growth moderated in most sub-sectors, and the various core inflation measures all remained within the Bank’s target range. Against this backdrop, we expect the Bank of Canada to cut rates again on July 24.

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Monthly data for inflation in Quebec and Canada – May 2024

In Quebec, annual CPI growth rose slightly in May, to 3.1% (+3.0% in April). Despite this slight increase, the annual inflation rate in Quebec remains close to its lowest level since March 2021. As in recent months, Quebec’s inflation rate was above the Canadian average in May, but the gap has narrowed significantly since October 2023.

In Canada, inflation also accelerated, to 2.9% on an annual basis (+2.7% in April). After lowering its key rate for the first time in June, the Bank of Canada could announce a second cut at its next decision on July 24, despite the slight upturn in inflation recorded during the month. Indeed, the BoC will have additional information that will be decisive between now and its next announcement, including June’s labor market and inflation statistics, as well as the BoC’s business and household surveys.

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Monthly data for inflation in Quebec and Canada – April 2024

Annual CPI growth in Quebec slowed in April to 3.0% (+3.6% in March), the lowest annual price increase in Quebec since March 2021. Inflation in Quebec has undergone a number of ups and downs in recent months. Nevertheless, the trend towards the 2% target continues.

In Canada, inflation slowed to 2.7% on an annual basis (+2.9% in March), also the smallest increase since March 2021. April’s inflation statistics should enable the Bank of Canada to make its first rate cut at its announcement on June 5. Indeed, the annual growth rates of the various core inflation measures continued to move favorably towards the 2% target, and are now all within the BoC’s target range.

Please note this publication is only issued in French.

Monthly data for inflation in Quebec and Canada – March 2024

Annual CPI growth in Quebec rebounded slightly to 3.6% in March (+3.3% in February), as housing and gasoline prices continue to exert upward pressure on the inflation rate. In addition, Quebec once again boasts the highest inflation rate in Canada, mainly due to services inflation, which remains close to the peak recorded in December 2022.

In Canada, inflation accelerated slightly in March, to 2.9% on an annual basis (+2.8% in February). Despite this acceleration, core inflation measures continued to show significant progress towards the 2% target. In this sense, conditions are ripe for the Bank of Canada (BoC) to cut its key interest rate for the first time this summer.

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Monthly data for inflation in Quebec and Canada – February 2024

Annual CPI growth in Quebec was stable at 3.3% in February (+3.3% in January), remaining at its lowest level in almost three years. There was a marked slowdown in food prices, but this was offset by higher gasoline prices.

In Canada, inflation slowed to 2.8% on an annual basis (+3.9% in January). This was an unexpected slowdown, as analysts were expecting inflation to accelerate to 3.1%. In addition, annual core CPI growth fell to 2.8% (+3.1% in January), the lowest since July 2021.

The Bank of Canada will take a positive view of February’s inflation statistics. In this context, we believe that the release of similarly encouraging data next month could represent the confirmation the Bank has been waiting for to officially open the door to possible cuts in the policy rate.

Please note this publication is only issued in French.

Monthly data for inflation in Quebec and Canada – January 2024

Annual CPI growth in Quebec moderated sharply to 3.3% in January (+4.0% in December). This is the lowest annual price growth recorded since April 2021. This slowdown is largely attributable to the year-on-year decline in gasoline prices in January (-1.3%). Overall, price growth continues to slow in five of the eight main categories of goods and services.

In Canada, inflation slowed to 2.9% year-on-year (+3.4% in December). This is a slower pace than had been anticipated, when private-sector analysts were forecasting an inflation rate of 3.2%. In addition, annual core CPI growth fell to 3.1% (+3.4% in December), the lowest since November 2021.

The Bank of Canada will take a positive view of January’s inflation statistics. Indeed, the trend in core CPI represents a step in the right direction, but the Bank will want to see sustained progress towards the 2% target before lowering its key rate. In this context, the BoC is unlikely to announce any rate cuts in the short term.

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Monthly data for inflation in Quebec and Canada – December 2023

Annual CPI growth in Quebec rose again in December, to 4.0% (+3.6% in November). For 2023 as a whole, average annual inflation fell sharply to 4.5% (6.7% in 2023).

As in Quebec, inflation accelerated in Canada in December, to 3.4% on an annual basis (+3.1% in November). In particular, the monthly statistics showed that core inflation in Canada remains persistent, showing little progress since mid-2023. Given these developments, combined with persistently high inflation expectations, it is unlikely that the Bank of Canada will announce rate cuts in the short term.

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Monthly data for inflation in Quebec and Canada – November 2023

In Annual CPI growth in Quebec fell again in November, to 3.6% (+4.2% in October). This is the slowest pace of price growth since April 2021. Despite this slowdown, the trend observed in recent months continued in November, with Quebec still posting the highest inflation rate in Canada.

In Canada, inflation treaded water in November, rising by 3.1% on an annual basis (+3.1% in October). On a more positive note, the Bank of Canada’s core inflation measures continued to show progress towards the 2% target. Against this backdrop, the Bank of Canada is likely to judge that its monetary policy is sufficiently restrictive, and that further increases in its key rate will not be necessary.

Please note this publication is only issued in French.

Monthly data for inflation in Quebec and Canada – October 2023

In Quebec, growth in the consumer price index moderated to 4.2% in October (+3.8% in September). Despite this, Quebec continues to have the highest inflation rate in Canada, mainly due to services inflation, which is influenced by tensions on the labor market and the resulting wage pressures.

In Canada, overall inflation slowed to 3.1% in October (+3.8% in September). This slowdown was mainly due to the significant drop in gasoline prices over the month (-7.8%). Moreover, the sharp decline in various measures of core inflation favoured by the Bank of Canada should enable it to remain on the sidelines when it makes its next decision on December 6, leaving rates unchanged at 5% for a third consecutive decision.

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Monthly data for inflation in Quebec and Canada – September 2023

In Quebec, the consumer price index rose by 4.8% year-on-year in September (+4.6% in August). The rise in inflation in September was due in particular to the evolution of gasoline prices, which rose by 11.0% in September compared with a year earlier.

In Canada, inflation slowed slightly to 3.8% (+4.0% in August). Core inflation, which excludes food and energy, moderated further to 3.2% (+3.6% in August). This positive trend in core inflation in September should enable the Bank of Canada to keep its key rate unchanged at 5.0% at its next announcement on October 25. This will give the Bank time to assess whether current monetary policy is sufficiently restrictive.

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Monthly data for inflation in Quebec and Canada – August 2023

Inflation accelerated again in Quebec in August, to 4.6% (+3.9% in July). This was to be expected, given the rise in gasoline prices during the month. Core inflation, which excludes food and energy prices, also rose in August, to 4.3%, signalling that underlying inflationary pressures remain strong in Quebec.

In Canada, total CPI rose to 4.0% (+3.3% in July), and core CPI to 3.6% (+3.4% in July). Inflation remains widespread in Canada, and the acceleration of core inflation in August increases the likelihood that the Bank of Canada will decide to raise its key rate again at its next announcement on October 25.

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Monthly data for inflation in Quebec and Canada – July 2023

In Quebec, the consumer price index (CPI) rose by 3.9% year-on-year in July (+3.6% in June). Inflation is thus back on the rise, after two consecutive declines. In Canada, inflation also rose, to 3.3% (+2.8% in June).

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Monthly data for inflation in Québec and Canada – June 2023

In Quebec, inflation measured by the 12-month change in the consumer price index (CPI) slowed to 3.6% in June (+4.0% in May). Core inflation, which excludes food and energy, continued to outpace total inflation, rising to 4.4% in June.

In Canada, inflation moderated to 2.8% (+3.4% in May). Little progress was made, however, on the BoC’s preferred measures of core inflation – median and truncated CPI – which remained above the upper limit of the Bank’s target range.

Please note this publication is only issued in French.

Monthly data for inflation in Quebec and Canada – May 2023

In Quebec, the consumer price index (CPI) rose by 4.0% year-on-year in May (+4.8% in April), its lowest level since June 2021. The slowdown in inflation was mainly due to falling gasoline prices.

In Canada, the moderation in inflation was more marked, coming in at 3.4% (+4.4% in April). The core CPI, which excludes food and energy, rose by 4.0% year-on-year (+4.4% in April). The slowdown in overall inflation will be welcomed by the Bank of Canada, but the persistence of core inflation could prompt it to raise its key rate again at its next announcement on July 12.

Please note this publication is only issued in French.

Monthly data for inflation in Quebec and Canada – April 2023

In Quebec, inflation measured by the 12-month change in the consumer price index (CPI) slowed to 3.6% in June (+4.0% in May). Core inflation, which excludes food and energy, continued to outpace total inflation, rising to 4.4% in June.

In Canada, inflation moderated to 2.8% (+3.4% in May). Little progress was made, however, on the BoC’s preferred measures of core inflation – median CPI and truncated CPI – which remained above the upper limit of the Bank’s target range.

Please note this publication is only issued in French.

Monthly data for inflation in Québec and Canada – March 2023

In Quebec, the consumer price index (CPI) rose by 4.7% in annual variation in March. The downward trend in inflation thus continued, supported mainly by the decline in gasoline prices (-13.8% year-over-year).

In comparison, inflation in Canada stood at 4.3% (+5.2% in February), a low since August 2021. These statistics are in line with the Bank of Canada’s forecasts published last week in its Monetary Policy Report, and signal that it should remain on the sidelines in the coming months.

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Monthly data for inflation in Québec and Canada – December 2022

In Quebec, the Consumer Price Index (CPI) rose by 6.3% in annual variation in December. This is a weaker price increase than in November (+6.8%), mainly due to lower gasoline prices.

In Canada, inflation also slowed to 6.3% (+6.8% in November).

Please note this publication is only issued in French.