Canada Inflation Rate Rises to 2.3%, Highest Since October 2014

Consumer prices in Canada increased 2.3 percent year-on-year in March of 2018, above 2.2 percent in February and compared to market expectations of 2.4 percent. It is the highest inflation rate since October of 2014, as prices in seven of the eight major components rose, mainly gasoline. Excluding gasoline, inflation was 1.8 percent, the same as in February.
Statistics Canada | Joana Taborda | 4/20/2018 12:43:14 PM
Seven of eight major components increased on a year-over-year basis in March. The clothing and footwear index (-0.1 percent) was the lone major component to decline year over year.

For the second consecutive month, energy prices rose more on a year-over-year basis. Gasoline prices were 17.1 percent higher compared with March 2017, and were the largest contributor to the gain in energy prices.

The price of services was up 2.7 percent year over year in March. Passenger vehicle insurance premiums rose 1.4 percent in the 12 months to March. Recent interest rate increases continue to impact the mortgage interest cost index (+2.8 percent), which posted its eighth consecutive year-over-year rise.

Consumers paid less on a year-over-year basis for food in March (+1.7 percent) than they did in February (+2.1 percent). Prices for fresh vegetables (-2.1 percent) and meat (-0.4 percent) fell month over month.

Prices for durable goods increased 0.3 percent in the 12 months to March, following a larger gain in February (+0.6 percent). The purchase of passenger vehicles index declined 1.5 percent on a month-over-month basis in March, reflecting higher rebates reported for various 2018 model-year vehicles.

On a monthly basis, prices rose 0.3 percent, below 0.6 percent in February.

The BoC's annual core inflation, which excludes volatile items, edged down to 1.4 percent from 1.5 percent.

 Canada Inflation Rate Rises to 2.3%, Highest Since October 2014