The consumer price index increased 1.7 per cent in April from a year earlier, slower than the Bank of Canada’s target rate of two per cent. At the same time, the two measures the central bank uses to correct for noisy price changes continued to drift higher. (The Logic)

Talking point: On its own, Statistics Canada’s latest reading of headline inflation supports a cut when the Bank of Canada next sets the benchmark borrowing rate on June 4. However, the sharp drop in the pace of year-over-year increases was mostly caused by the elimination of the consumer carbon tax and lower gasoline prices; excluding energy costs, the consumer price index increased 2.9 per cent year over year, compared with 2.5 per cent the previous month. What’s more, the average of the central bank’s two preferred measures of “core” inflation climbed to 3.2 per cent from an average of 2.9 per cent in March, suggesting the U.S. trade war could be boosting the cost of goods and services. Unemployment is also rising, but hotter inflation will constrain the extent to which the central bank can do anything about it.