Canada June CPI drops to 2.8% while food prices jump over 30%

Statistics Canada reported that the national consumer price index for June 2024 fell to an annual rate of 2.8%, down from 3.2% in May and moving below the 3% threshold. The decline was mainly driven by a 10% month‑over‑month drop in gasoline prices, which offset broader price pressures.

Core inflation, which excludes volatile energy and food, held steady at 2.2% compared with May. By contrast, food prices continued to rise, with the overall grocery index up 3.9% year‑over‑year, marking the 17th consecutive month of growth faster than headline inflation. Specific items saw sharp increases: tomatoes surged 31.7%, lettuce 19.3%, carrots 16.6%, fresh or frozen beef 13.8%, and bananas 11.5%.

Analysts noted that if inflation remains elevated, the Bank of Canada may raise interest rates, affecting borrowing costs. Some market commentators suggested that defensive consumer‑goods stocks such as Loblaw Companies and energy producer Cenovus Energy could benefit from higher food and energy prices, offering a potential hedge for investors.