Inflation rises to 1.9% in June as vehicle price hikes accelerate

The annual pace of inflation accelerated to 1.9% in June as consumers were paying more at car dealerships, Statistics Canada said Tuesday.

The June price hike is up from 1.7 % in May and was largely in line with economists’ expectations.

StatCan said gasoline prices were nearly unchanged in June as higher crude oil prices and geopolitical conflicts ratcheted up pressure at the pumps. Motorists saw a steeper monthly decline in prices this time last year, which the agency said led to a rise in headline inflation.

Excluding energy, annual inflation was 2.7 % in June. The removal of the consumer carbon price at the start of April continues to dampen the annual price comparisons. Food inflation cooled somewhat to 2.9 % in June, down from 3.4 % in May. StatCan pointed to lower costs for fresh vegetables as driving down inflation at the grocery store.

Shelter inflation also continued to ease, dropping a tenth of a percentage point to 2.9 % year-over-year in June.

But StatCan said price hikes for passenger vehicles accelerated to 4.1 % in June from 3.2 % the month previous. Used car prices increased annually for the first time in 18 months thanks to tighter inventories.

Furniture prices were also rising faster in June as part of broader acceleration from durable goods in StatCan’s consumer basket.

The June figures mark the final look the Bank of Canada will get at price data before its next interest rate decision on July 30. The central bank’s preferred core measures of inflation showed no signs of easing in June, remaining around 3.0%.

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