MNI DATA BRIEF: Canada's 3.4% Apr CPI is Fastest Since 2011

Canada's consumer price index rose 3.4% in April from a year earlier, the fastest pace in a decade, testing the central bank's view inflation won't move much past 3% and will later fade away because of weak spots in an economy fighting its way out of the pandemic. The year-over-year inflation rate jumped from 2.2% in March and 1.1% in February, in large part due to base comparisons against Covid-induced weakness in 2020.

Statistics Canada's report Wednesday said gasoline prices jumped a record 63%, while CPI excluding energy rose 1.6% in April versus 1.1% in March. Monthly prices rose 0.5% in April, the same as in March.

BOC Governor Tiff Macklem told reporters Thursday he's sticking with his forecast inflation will soon reach around 3% and later recede because some parts of the economy remain very weak. The BOC's three preferred core inflation measures averaged 2.1% in April, from 1.9% in March. Industry sources have told MNI that supply bottlenecks and pockets of strong demand will keep inflation pressures in place in coming months.