Deflation expected in April CPI report as pandemic lockdown took hold

Deflation expected in April CPI report as pandemic lockdown took hold
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OTTAWA — Statistics Canada is expected to report that the consumer price index decreased in April, the first full month the economy was gripped by the COVID-19 pandemic.

Economists on average had expected a reading of negative 0.28 per cent for April, according to financial markets data firm Refinitiv.

That’s a further decline from March when the annual pace of inflation in Canada was 0.9 per cent, marking the biggest one-month decrease in more than a decade.

It was down from 2.2 per cent in February as the price of oil collapsed and the economy then ground to a halt when governments ordered the closure of non-essential businesses in mid-March to slow the spread of COVID-19.

The Consumer Price Index measures price changes for a fixed basket of goods and services that are divided into eight major components.

These are food, shelter, household operations, furnishings and equipment, clothing and footwear, transportation, health and personal care, recreation, education and alcoholic beverages, tobacco products and recreational cannabis.

This report by The Canadian Press was first published May 20, 2020.

The Canadian Press

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