Inflation Monitor – June 2022
This report provides current analysis of recent consumer price inflation data.
Total CPI inflation has exceeded the upper limit of the Bank of Canada’s 1%-3% control range since April 2021. At 6.8% in April 2022, CPI inflation now sits at its highest level since the introduction of inflation targeting in 1991.
Strong consumer demand for goods running into constrained supply—along with surging energy and food prices—have contributed to boosting goods CPI inflation from -2.8% in April 2020 to 9.1% in April 2022.
Financial market participants largely do not see the current high-inflation environment as permanent, with CPI inflation returning to the 2% target over the medium to long term. To date, wage settlements data also show little indication of higher observed and expected inflation feeding into wage negotiations in the unionized sector.
This finding is consistent with the view that supply or sector-specific issues are a key driver of high inflation. A finding of broader-based inflationary pressures would be more consistent with stronger aggregate demand as the primary driver of high inflation.
Parliamentary Budget Officer