Canada Inflation Rate Highest Since November 2014


Consumer prices in Canada increased by 1.6 percent year-on-year in December 2015, following a 1.4 percent growth in the previous month while missing market expectations of 1.7 percent. It was the highest inflation rate recorded since November 2014 as cost of food and shelter continued to rise while transport prices went up for the first time since October 2014.

Year-on-year, prices were up in all eight major components on a year-over-year basis in December, with the food and shelter indexes contributing the most to the rise in the CPI. The transportation index, which includes gasoline, registered its first year-over-year increase since October 2014.

Consumers paid 3.7 percent more for food, as prices for food purchased from stores were up 4.1 percent, following a 3.7 percent increase the previous month. The acceleration was mainly attributable to the fresh vegetables and fresh fruit indexes, which rose more on a year-over-year basis in December than in the previous month. In contrast, the meat index increased less in the 12 months to December (+2.4 percent) than in November (+3.9 percent). Prices for food purchased from restaurants rose 2.8 percent, matching the increase in November.

The transportation index was up 0.6 percent, after recording 13 consecutive declines. This turnaround was mainly attributable to the gasoline index, which recorded a smaller decrease in December (-4.8 percent) than in November (-10.6 percent). In addition, the purchase of passenger vehicles index rose 3.1 percent, following a 1.9 percent increase the previous month.

The clothing and footwear index was up 0.7 percent, after rising 2.1 percent in November. The men's clothing index registered a smaller increase in December than in November, while prices for women's clothing declined in the 12 months to December, after increasing in November.

Annual core inflation slowed to 1.9 percent from 2 percent in November.

On a monthly basis, consumer prices dropped 0.5 percent after falling by 0.1 percent in November, as transport prices and cost of recreation, education and reading declined by 0.6 percent and 0.8 percent, respectively. 

Canada Inflation Rate Highest Since November 2014


Statistics Canada | Joana Ferreira | joana.ferreira@tradingeconomics.com
1/22/2016 1:47:12 PM