Sibley Creek Section 2 of 7 Inflation
Is the 2% target being met, and on what measures and what breadth?
Latest release Headline CPI, TK
Six plates trace where prices sit relative to the Bank's 2% target: the headline print, the preferred cores, the breadth of pressure across the basket, the sub-aggregate composition, expectations from households and firms, and the FX and wage channels feeding pass-through.
Plate 01 Headline CPI, year-over-year
As of TK
Headline CPI printed TK in the latest month, TK relative to consensus.
Headline CPI printed TK y/y, TK relative to consensus and TK relative to the prior month. Shelter is still doing the heavy lifting; mortgage interest cost remains the largest single contributor. Three-month annualized momentum sits a notch above the year-over-year, consistent with a flat near-term path.
Plate 02 BoC preferred core measures (core-trim, core-median)
As of TK
Preferred cores reading TK; core-trim TK against prior month.
Core-trim printed TK and core-median TK. The 3-month annualized profile on both measures sits below the year-over-year, the cleanest sign yet that the underlying impulse is fading. Common is shown for historical anchor only - the Bank has deprioritized it since late 2022.
Plate 03 Breadth of price pressure
As of TK
Breadth narrowed; share of basket above 3% still clustered in shelter.
DATA NOT YET WIRED
Breadth share-of-basket derivation not yet emitted.
Roughly TK of the CPI basket is now running above 3% year-over-year, down from a peak above two thirds in 2022. The remaining cluster is concentrated in shelter sub-components. Goods breadth has effectively normalized; services breadth is the open question.
Plate 04 Sub-aggregates: shelter, services ex-shelter, goods, food, energy
As of TK
Shelter and services-ex-shelter remain the only above-target lines.
Shelter is still printing well above the band and accounts for most of the gap to target. Services-ex-shelter is gradually easing but slowly. Goods-ex-energy is at target and energy is roughly flat year-over-year. The residual stickiness is shelter-resolution-dependent.
Plate 05 Inflation expectations: CSCE + BOS
As of TK (CSCE, BOS)
Consumer 1y expectations eased; BOS firms above 3% kept declining.
The Bank's Canadian Survey of Consumer Expectations one-year measure eased to roughly TK from a higher prior print, and the five-year measure held near TK. The share of BOS firms expecting CPI above 3% has been falling for several consecutive quarters - still above the long-run baseline, but the direction is unambiguous.
Plate 06 Pass-through watch: FX and wages into goods / services
As of TK (CPI); TK (FX)
CAD weakness has not yet shown up in goods-ex-energy; wages still bite into services.
DATA NOT YET WIRED
Pass-through derivations gated on basket-weighted CPI ex-aggregates (canon 4.2 element 6).
USDCAD has drifted weaker over the past year, but goods-ex-energy CPI has stayed near target - the FX pass-through window is open but quiet so far. On the wage side, the gap between LFS-Micro wage growth and services-ex-shelter CPI has narrowed only modestly. Interpretation is prose only; no regression in basics.