Canada's Inflation Surge Mainly Due to Energy Prices: Rosenberg Research

Canada's inflation rate rose to 3.0% in July, but Rosenberg Research says most of that heat came from energy and not underlying prices.

The Statistics Canada report showed consumer prices increased by 3.0% year-over-year in July, surpassing the expected 2.9%. However, when stripping out energy-related components, the inflation rate would have been closer to 1.8%, according to Rosenberg Research.

This distinction is crucial for the Bank of Canada's interest rate decisions, as they focus on persistent inflation rather than one-off swings in gasoline or utilities.

Markets often react less to short-term energy price jumps and more to measures that indicate whether price pressure is spreading across services and wages.