Canada Inflation Rate Down To 3-Month Low Of 1.6%


Consumer prices in Canada rose 1.6 percent year-on-year in March of 2017, easing from a 2 percent increase in February and below market expectations of 1.8 percent. Gasoline prices slowed and food and clothing cost declined.

Year-on-year, transportation cost rose 4.6 percent after increasing 6.6 percent in February, led by the gasoline index. Gasoline prices rose 15.2 percent, following a 23.1 percent increase in February. The purchase of passenger vehicles index was up 2.1 percent in the 12 months to March, following a gain of 3.6 percent in February.

The clothing and footwear index fell 0.9 percent, following a 0.9 percent increase the previous month. This turnaround was led by a decrease in the women's clothing index, down 1.0 percent, following a 3.5 percent increase. A larger year-over-year decline in the children's clothing index (-4.4 percent) more than offset a 0.3 percent increase in the footwear index.

Food cost went down for the sixth consecutive month, dropping 1.9 percent. Prices for food purchased from stores declined 3.6 percent while prices for food purchased from restaurants posted a 2.4 percent increase.

Shelter cost increases in March matched those of February, up 2.2 percent. The homeowners' replacement cost index was the main upward contributor to the 12-month change in the shelter index, up 4.0 percent, despite slowing growth since November 2016. At the same time, rent increased 0.6 percent, after posting a 0.5 percent increase for six consecutive months.

The recreation, education and reading index rose 3.6 percent, following a 3.3 percent gain in February. This acceleration was led by the travel tours index, up 6.8 percent, following a 0.5 percent decline the previous month. In contrast, traveller accommodation prices rose less in March than in February.

On a monthly basis, consumer prices went up 0.2 percent, the same as in February.

The core index rose 0.3 percent on the month and 1.3 percent on the year.


Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com
4/21/2017 12:48:24 PM