Canada's Inflation Rate Slows to 2.3% in January


Canada's inflation rose 2.3% in the 12 months to January 2011, following the 2.4% increase posted in December 2010.

Energy prices rose 9.0% during the 12 months to January, following a 10.5% increase in December. Gasoline prices increased 13.0% in January, matching the increase in December. Consumers also paid 6.4% more for electricity in January compared with the same month last year.

Excluding energy, the Consumer Price Index (CPI) rose 1.7% in the 12 months to January, identical to the increase in December.

On a seasonally adjusted monthly basis, consumer prices rose 0.3% from December 2010 to January 2011, the seventh consecutive monthly increase. In addition, the transportation index, which includes gasoline, also increased for the seventh consecutive month, rising 1.1% from December to January. The food index went up 0.5%, matching the increase in December.

On a year-over-year basis, prices increased in seven of the eight major components of the CPI in the year to January. The only exception was clothing and footwear.

The largest increase occurred in the transportation component, where prices rose 4.8% in the 12 months to January, following a 4.9% advance in December.

In addition to higher gasoline prices in the 12 months to January, consumers paid 4.8% more in passenger vehicle insurance premiums. They also paid more for the purchase of passenger vehicles and for air transportation.

Shelter costs rose 2.2% in January, following a 2.7% rise in December. Along with higher electricity prices, homeowners' replacement cost increased 3.6%. However, the mortgage interest cost index, which measures the change in the interest portion of payments on outstanding mortgage debt, continued to decrease.

Food prices rose 2.1% in the 12 months to January, following a 1.7% increase in December. Consumers paid 4.0% more for meat and 10.7% more for sugar and confectionery. Prices for food purchased from restaurants also increased 2.7%.

The recreation, education and reading price index rose 1.6% in January, after increasing 1.1% in December. Prices rose for cablevision and satellite services and for the use of recreational facilities and services. Conversely, prices fell for computer equipment and supplies as well as for video equipment.

Prices for household operations, furnishings and equipment increased 1.6% between January 2010 and January 2011. Within this component, higher prices were recorded for several items, notably for child care and domestic services.

Prices for alcoholic beverages and tobacco products rose 3.1% in January. Consumers paid 5.4% more for cigarettes.

In January, prices for clothing and footwear continued to decline on a year-over-year basis. Clothing and footwear prices fell 2.4% in January, following a 2.0% decrease in December. Consumers paid less for women's clothing and children's clothing.


TradingEconomics.com, Statistics Canada
2/18/2011 1:14:55 PM