Lower food prices softens impact as inflation rate drops
Posted March 24, 2017 6:30 am.
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OTTAWA, ON. (NEWS 1130) – The annual pace of inflation in Canada ticked lower in February as higher prices for gas were offset in part by lower costs for fresh fruit and vegetables.
Statistics Canada says the consumer price index rose two per cent on a year-over-year basis in February. The move compared with a 2.1 per cent increase in January. Economists had expected it rise 2.1 per cent in February as well.
Prices were higher in seven of the eight major components, with food the only one to decline.
Excluding gasoline, the February consumer price index was up 1.3 per cent compared with a year ago following a 1.5 per cent in January. Transportation costs gained 6.6 per cent compared with a year ago, boosted by a 23.1 per cent rise in gasoline — which was at an unusually low level in early 2016. Shelter costs rose 2.2 per cent.
Food costs fell 2.3 per cent as prices for food bought from stores fell 4.1 per cent. Prices for food bought from restaurants rose 2.3 per cent but fresh vegetables dropped 14.0 per cent and fresh fruit slipped 13.3 per cent, partly reflecting a spike in prices last winter.
The annual pace of inflation slowed in seven provinces on a year-over-year basis in February while BC and Ontario held steady at 2.3 per cent. Manitoba was the only province to show an increase in the annual pace of inflation as it increased to 2.3 per cent compared with 2.1 per cent in January.
The agency says the Bank of Canada’s three preferred measures for core inflation saw year-over-year increases last month of 1.3 per cent, 1.9 per cent and 1.6 per cent.
