Canada Inflation Rate at 14-Month High


Consumer prices in Canada increased by 2.0 percent year-on-year in January 2016, following a 1.6 percent growth in the previous month and above market expectations of 1.7 percent. It was the highest reading since November 2014, as food cost rose at a faster pace and gasoline prices went up for the first time since October 2014.

In January, gasoline prices were up on a year-over-year basis for the first time since October 2014; this occurred despite a monthly decline of 6.0 percent. The upward contribution of gasoline to the change in the CPI closed the gap between the all-items CPI and the all-items CPI excluding gasoline.

Prices rose in seven of the eight major components on a year-over-year basis in January, with the food and transportation indexes contributing the most to the rise in the CPI. The clothing and footwear index was the only major component to decline on a year-over-year basis in January.

Food prices were up 4.0 percent in the 12 months to January, after rising 3.7 percent in December. This acceleration was attributable to a gain in prices for food purchased from stores, which rose 4.6 percent year over year in January, after increasing 4.1 percent the previous month. Prices for fresh vegetables were up 18.2 percent in the 12 months to January, following a 13.3 percent increase in December. The other fresh vegetables index, which includes broccoli, cauliflower, celery and peppers among other products, registered its largest year-over-year increase (+22.7 percent) since April 2009. Meat prices rose less in the 12 months to January than in December. Prices for food purchased from restaurants were up 2.5 percent year over year in January, following a 2.8 percent increase the previous month.

The transportation index rose 2.2 percent year over year in January, following a 0.6 percent increase in December. The acceleration was led by the gasoline index, which was up 2.1 percent in the 12 months to January, after declining 4.8 percent the previous month. In addition, the purchase of passenger vehicles index was up more on a year-over-year basis in January than the previous month.

The clothing and footwear index decreased 0.3% percent year over year in January, after posting a 0.7 percent increase in December. The decline was led by the men's clothing index, which was down 1.4 percent in the 12 months to January, following a 0.8 percent increase the previous month. In January, consumers paid 1.4 percent less for footwear compared with the same month a year earlier.

Annual core inflation accelerated to 2.0 percent from 1.9 percent in December.

On a monthly basis, consumer prices rose 0.2 percent after 0.5 percent in December, as cost of food increased by 0.6 percent and household operations, furnishings and equipment went up by 0.2 percent while transportation cost fell 0.8 percent. 

Canada Inflation Rate at 14-Month High


Statistics Canada | Yekaterina Gucshina | yekaterina@tradingeconomics.com
2/19/2016 1:47:11 PM