HomeContributorsFundamental AnalysisCanadian Consumer Price Inflation Edges Up to 1.5% in February

Canadian Consumer Price Inflation Edges Up to 1.5% in February

  • The consumer price index rose up 1.5% from year-ago levels in February, a tick above the median consensus forecast for price growth to remain steady at 1.4%.
  • Food price growth accelerated to 3.2% year-on-year (from 2.8% in January) while clothing and footwear rose to 1.6% (from 0.5%). Energy prices remained in negative territory (-5.7%), but moved up from -6.9% in January.
  • More broadly, goods price inflation pushed into positive territory (+0.6% y/y), but service price growth slowed (to 2.3% from 2.7% in January).
  • On a seasonally-adjusted basis, prices were up 0.2% month-on-month. Gains were relatively broad-based with only household operations pulling back in February (-0.3%).
  • Core inflation measures were mostly unchanged with both CPI-median and CPI-trim steady at 1.8% and 1.9% respectively. The CPI-common measure edged down to 1.8% from 1.9%.

Key Implications

  • The slight firming in inflation in February does little to change the broader picture of price growth that is neither too hot, nor too cold.
  • Core inflation has now been modestly below 2% since August of last year. Its relative stability suggests little need for a change in policy in either direction. If anything, the slight move down in the CPI-common measure reinforces the view that the Bank of Canada is likely to remain on hold (perhaps) indefinitely.
TD Bank Financial Group
TD Bank Financial Grouphttp://www.td.com/economics/
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.

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