Canada’s inflation slowed more than expected in February, with headline CPI easing from 2.3% yoy to 1.8% yoy, below market expectations of 1.9%. On a monthly basis, prices rose 0.5% mom, also slightly below forecasts of 0.6%, suggesting price pressures continued to moderate.
The slowdown was driven by declines across several components. Energy prices as a key drag, with gasoline falling -14.2% yoy and natural gas down -17.1% yoy. Other categories that exerted downward pressure included homeowners’ replacement cost (-2.1%), other owned accommodation expenses (-2.6%), and travel tours (-3.1%).
Core inflation measures also softened. CPI median and CPI trimmed both eased to 2.3% yoy, while CPI common slowed from 2.7% yoy to 2.4% yoy, all coming in below expectations. The broad-based cooling in underlying inflation suggests price pressures were easing gradually before the oil shock.
