Canada Inflation Rate Highest Since 2014
The consumer price inflation in Canada increased to 2.2 percent year-on-year in February of 2018, up from 1.7 percent in the prior month and well above market consensus of 2 percent. It was the highest inflation rate since October of 2014, as prices rose mostly for transportation, especially gasoline and vehicles. Meanwhile, food inflation slowed.
3/23/2018 1:30:27 PM
The main upward contributors to the 12-month change in February included gasoline (+12.6 percent from +7.8 percent in January) and purchase of passenger vehicles (+2.5 percent from +1.4 percent), mainly due to lower rebates on 2018 model-year vehicles.
Higher prices for services also contributed to the increase in the CPI. In February, consumers paid more on a year-over-year basis for travel tours (+2.2 percent) and Internet access services (+5.2 percent). The mortgage interest cost index rose 2.3 percent, reflecting, in part, recent interest rate increases. These gains in service prices were moderated by lower traveller accommodation (-4.8 percent) costs.
Meanwhile, food prices rose 2.1 percent in February compared to a 2.3 percent gain in the previous month.
On a monthly basis, consumer prices were up 0.6 percent, compared to a 0.7 percent increase in January and slightly above forecasts of a 0.5 percent gain.
The BoC's annual core inflation, which excludes volatile items, rose to 1.5 percent from 1.2 percent in January, reaching the highest in a year.