09:18 AM EST, 02/18/2025 (MT Newswires) -- Canadian consumer prices rose just 0.1% month over month, leaving the annual rate of total inflation at 1.9%, up just a tick from last month on base effects, noted Desjardins after Tuesday's release of the CPI data.

All of that was in line with the consensus forecast of economists, said the bank. Excluding food and energy, price growth was also soft, thanks to the GST/HST break.

That said, these measures aren't representative of the underlying pace of price growth, stated Desjardins.

The Bank of Canada's preferred measures of inflation, which exclude the impacts of tax changes, accelerated more than expected on an annual basis. Core median and trimmed mean both clocked in at 2.7%. However, the unanticipated strength came from revisions to the seasonal adjustment factor much earlier in the 12-month measurement period, pointed out the bank.

The average of the three-month annualized rates of core median and trimmed mean decelerated to 3.0% from 3.5% in December. In addition, the three-month annualized rate of core services excluding shelter, which the bank calculates in-house, also decelerated two ticks to 2.9%. As a result, the knee-jerk reaction to the hotter year-over-year core median and trimmed mean measures is being faded as recent trends appear more favorable.

It wasn't all good news though, added Desjardins. The share of the components rising faster than 3% jumped to 33% from 25% in the prior month. That's an indicator Canada's central bank closely watches.

The bank continues to believe the BoC hit the pause button in March, given that the activity data is also holding up well. But that call is still contingent on United States tariff news and upcoming data releases cooperating.