Statistics Canada said the consumer price index increased 2.7 per cent from a year earlier, compared with 2.9 per cent the previous month. The Bank of Canada’s preferred measures of “core” inflation also moderated, suggesting underlying price pressures are easing. (The Logic)

Talking point: The central bank’s conditions for another rate cut on July 24 appear to have been met. Policymakers could apply caution, since their target is year-over-year increases of two per cent and inflation remains on the high side of their comfort zone of one per cent to three per cent. Still, the headline number has now stayed inside that zone for six consecutive months and public expectations of future inflation are moderating. More importantly, there is ample evidence the economy is cooling. Prices for durable goods dropped 1.8 per cent from June 2023, highlighted by the largest yearly drop in passenger vehicle prices since 2015. Furniture costs also fell. Statistics Canada observed that higher interest rates are “impacting the spending patterns of consumers.” It might be time to reverse those patterns.