Canada Annual Inflation Rate Rises to 2% in December

The annual inflation rate in Canada rose to 2.0 percent in December 2018 from 1.7 percent in the previous month. Figures came above market expectations of 1.7 percent, mainly driven by higher prices of various services, including air transportation, telephone services and travel tours.

Year-on-year, prices of transportation increased further (1.7 percent from 1.0 percent in November), boosted by higher cost of air transportation. Additionally, prices went up at a faster pace for food (2.9 percent from 2.2 percent); household operations, furnishings and equipment (2.1 percent from 0.9 percent); recreation, education and reading (1.5 percent from 1.2 percent); health and personal care (1.0 percent from 0.7 percent); and alcoholic beverages and tobacco products (4.4 percent from 4.6 percent). Meanwhile, shelter costs advanced 2.2 percent, slowing from a 2.4 percent gain in November. Also, prices of clothing and footwear eased (0.2 percent from 0.6 percent).

Regarding special aggregates of the CPI, prices for durable goods declined 0.8 percent, after falling 0.1 percent in the prior month. In addition, the price of energy products dropped 3.7 percent, following a 1.3 percent decrease in November, as crude oil prices continued to fall amid a global supply glut. On the other hand, cost of services rose 3.5 percent, after a 2.7 percent gain in the previous month.

On a seasonally adjusted monthly basis, consumer prices fell 0.1 percent, following a 0.4 percent decline in the prior month and compared with market consensus of a 0.4 percent decrease. Cost of food and the health and personal care rose the most.

The BoC's annual core inflation, which excludes volatile items, increased to 1.7 percent from 1.5 percent in November.

Canada Annual Inflation Rate Rises to 2% in December

Statistics Canada | Stefanie Moya |
1/18/2019 2:03:08 PM