Canada's inflation edges up to 1.5% in February

Marco Green
Марта 24, 2019

"So, households won't be seeing the same increase in borrowing costs in 2019 that they did in 2018". Separate data released Friday showing retail sales unexpectedly declined in January reinforced the economic weakness.

Economists had expected a reading of 1.4 per cent for February. The headline inflation rose 1.5 percent year-on-year, as compared to the expectations of a stable price growth of 1.4 percent. Core measures - seen as a better gauge of underlying price pressures - dropped slightly to 1.83 per cent from 1.87 per cent.

Two of the three measures of core inflation were unchanged: the median rate at 1.8 per cent and the trim rate at 1.9 per cent.

The Canadian dollar dipped on the news, falling to an 11-day low of C$1.3428 to the USA dollar, or 74.47 US cents.

The bank's next interest rate announcement is scheduled for April 24 and most market operators are expecting it to announce no change. Goods price inflation came into positive territory, rising 0.6 percent year-on-year, but service price growth decelerated to 2.3 percent from 2.7 percent in January.

There are few signs of any price pressure in the report.

Excluding gasoline, the annual pace of inflation held steady at 2.1 per cent, the same as January.

Food has been a major driver of inflation gains over the past year.

Statistics Canada reported the consumer price index in February climbed 1.5 per cent compared with a year ago. The last time retail sales posted three declines in a row was between April and June 2012.

Canada's economy stalled in the final quarter of past year, and economists have been expecting it to remain weak to start 2019.

"After a weak December, there was at least some hope for January retailing in Canada, but hopes that didn't pan out in the data today", Avery Shenfeld, chief economist at CIBC Capital Markets in Toronto, said in a note to investors.

Nationally, the annual pace of inflation edged higher last month as gains in most spending categories offset lower gasoline prices.

Analysts had estimated a month-over-month increase of 0.4 per cent, according to Thomson Reuters Eikon. They have fallen 21 per cent since then.

The cost of gasoline was down 11.9 per cent compared with the same month past year as overall energy prices slipped 5.7 per cent.

Other reports by

Discuss This Article