Canada Annual Inflation Rate at 15-Month Low in January

The annual inflation rate in Canada fell to 1.4 percent in January 2019 from 2.0 percent in the previous month and below market expectations of 1.5 percent. It was the lowest inflation rate since October 2017, mainly due to cost of energy as gasoline prices declined amid an oversupply in the US.

Year-on-year, prices of transportation dropped (0.4 percent compared to 1.7 percent in December), mostly due to a decrease in cost of gasoline (-14.2 percent) amid an oversupply in the US. Also, prices eased for food (2.8 percent compared to 2.9 percent); household operations, furnishings and equipment (0.7 percent compared to 2.1 percent); recreation, education and reading (1.3 percent compared to 1.5 percent); and health and personal care (0.6 percent compared to 1.0 percent). On the other hand, cost increased further for shelter (2.4 percent compared to 2.2 percent); clothing and footwear (0.5 percent compared to 0.2 percent) and  alcoholic beverages and tobacco products (4.5 percent compared to 4.4 percent). 

Regarding special aggregates of the CPI, prices for durable goods fell 0.1 percent, after decreasing 0.8 percent in December. Additionally, the price of energy products went down 6.9 percent, following a 3.7 percent decrease in the prior month, namely gasoline (-14.2 percent, fuel oil and other fuels (-3.3 percent), and natural gas (-2.3 percent). Also, cost of services slowed to 2.7 percent from 3.5 percent in December.

On a monthly basis, consumer prices increased 0.1 percent, after a 0.1 percent decline in the previous month and compared with market forecasts of a 0.2 percent gain.

The BoC's annual core inflation, which excludes volatile items, rose to 1.5 percent, easing from a 1.7 percent increase in December.

Canada Annual Inflation Rate at 15-Month Low in January

Statistics Canada | Stefanie Moya |
2/27/2019 1:58:25 PM