Canada Inflation Rate Slows To 2% In February


Consumer prices in Canada increased 2 percent year-on-year in February of 2017, easing from a 2.1 percent rise in the preceding month and below market expectations of 2.1 percent. Telephone services declined and food prices posted the biggest drop since 1971. In contrast, transportation and shelter contributed the most to the rise in the CPI.

Year-on-year, transportation cost rose 6.6 percent after a 6.3 percent increase in January, led by gasoline prices. This acceleration occurred despite a 0.8 percent monthly decline in February. The purchase of passenger vehicles index increased less in February (3.6 percent) than in January (3.8 percent).

Prices of recreation, education and reading advanced 3.3 percent, following a 3.2 percent increase in January. A 6.2 percent rise in the traveller accommodation was partly attributable to major sporting events that took place in February. The travel tours index fell 0.5 percent, after increasing 5.5 percent a month earlier.

The household operations, furnishings and equipment index went up 0.6 percent, after rising 1.2 percent in the previous month. This deceleration was led by the telephone services index, which declined 2.2 percent, following a 1.6 percent increase in January. In contrast, the Internet access services cost rose 0.2 percent, following a 1 percent decline in January.

Consumers paid 2.3 percent less for food compared with a year ago, due to lower prices for fresh vegetables (-14.0 percent) and fresh fruit (-13.3 percent) which reflect a spike in their prices last winter. Also, the prices of dairy products fell 2.5 percent, its largest decrease since March 1994, namely lower cheese prices. Prices for food purchased from restaurants rose 2.3 percent, matching the gain in January.

On a monthly basis, consumer prices went up 0.2 percent after a 0.9 percent rise in January.

Excluding food and energy, consumer prices were up 0.4 percent on the year and excluding gasoline only, prices gained 1.3 percent. 

Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com
3/24/2017 2:08:41 PM