Canada Inflation Rate Hits 3-Month High of 1.9%

The annual inflation rate in Canada rose to 1.9 percent in March 2019 from 1.5 percent in the previous month and matching market expectations. It is the highest inflation rate since December. The transportation index drove headline inflation up, as gasoline prices declined less in March than in February.

Year-on-year, prices rose faster mainly for transport (1.9 percent vs 0.1 percent in February), as downward pressure from gasoline eased (-4.4 percent vs -11.9 percent); shelter (2.7 percent vs 2.4 percent); food (3.6 percent vs 3.2 percent) and household operations, furnishings and equipment (0.5 percent vs 0.2 percent). On the other hand, inflation slowed for recreation, education and reading (0.2 percent vs 1.0 percent); clothing & footwear (1.5 percent vs 1.6 percent); health and personal care (0.2 percent vs 0.6 percent) and alcoholic beverages, tobacco products and recreational cannabis (3.0 percent vs 4.1 percent).

Regarding special aggregates of the CPI, prices for durable goods rose 1.2 percent, after a 0.4 percent increase in the prior month, led by a 3.0 percent increase in the purchase of passenger vehicles index. Also, the price of energy products decreased much less (-1.2 percent vs -5.7 percent). Meanwhile, cost of services slowed to 2.2 percent following a 2.3 percent increase in February.

On a monthly basis, consumer prices increased 0.7 percent, the same pace as in February and in line with market consensus.

The BoC's annual core inflation, which excludes volatile items, rose to 1.6 percent in March from 1.5 percent in the previous month, hitting its highest level since December.

 Canada Inflation Rate Hits 3-Month High of 1.9%

Statistics Canada | Luisa Carvalho |
4/17/2019 1:32:49 PM