ECRI: Canadian Inflation Gauge Hits New Low

Canadian inflation remained in a steep cyclical downturn in March, according to the Canadian Future Inflation Gauge (CFIG) published by Economic Cycle Research Institute (ECRI). The value of ECRI’s CFIG lies in its ability to anticipate cyclical turning points in the Canadian inflation rate.

The CFIG dropped to 91.3 (1992=100) in March from 93.1 in February, as did its smoothed annualized growth rate to -16.7% from -15.1%, mainly due to a negative contribution from a measure of employment, offset in part by positive contributions from measures of money supply and commodity prices.

Canadian inflation has dropped sharply since last summer, as anticipated by the earlier plunge in the CFIG. Meanwhile, with the CFIG falling to a historical low in March, Canadian consumer prices are set to retreat further in the months ahead.

Canada’s key lending rate remains at ½ percent.

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