Core prices rose 1.5 percent in December, slowing for the sixth straight month and below the central bank's target for a third month, from 1.6 percent in November. Economists surveyed by Bloomberg forecast the rate would accelerate to 1.7 percent, the median of 21 estimates. The all-items index slowed to 2.4 percent from 2.5 in November, as economists expected.
Today's report shows that core inflation is slowing even earlier than Bank of Canada policy makers predicted yesterday, two days after cutting their benchmark rate for a second month. Central bankers said prices would drop throughout 2008, and that they would likely cut rates again to shield the economy from a possible U.S. recession.
The currency weakened 0.4 percent to C$1.0081 per U.S. dollar at 8:31 a.m. in Toronto, from C$1.0038.
Consumer prices rose 0.1 percent in December and the core index fell 0.3 percent. Economists correctly predicted the overall index's gain and said the core gauge would drop 0.1 percent in the month.
Prices have been pushed down by a Canadian dollar that rose 15 percent over the past 12 months, central bankers said this week. The currency, which had dropped since reaching a record 90.58 Canadian cents per U.S. dollar on Nov. 7, rose this week after the Fed's move.