The higher cost of gasoline pushed overall prices slightly higher in January compared to December, though prices compared to January of last year appeared to have settled after taking a recent jump.
However, the annual inflation rate edged down one-tenth of a point to 2.3 per cent in January, mostly because the pace of growth in energy costs slowed. But on a month-to-month basis, gasoline cost 3.5 per cent more in January than was the case in December, contributing to the 0.3 per cent monthly increase in overall consumer prices tracked by Statistics Canada.
The latest inflation numbers are unlikely to cause the Bank of Canada much concern as it approaches its next date for setting interest rates in just more than a week. Driven by rocketing commodity prices such as oil and food, inflation has been rising in many countries but appears not to have reached Canada. While the so-called headline inflation number remains above the bank’s two per cent target, the bank’s other closely watched index — underlying core inflation that excludes volatile items such as energy — remained well tethered at 1.4 per cent.
The cost of food rose 2.1 per cent on an annual basis in Canada in January, less than overall inflation. The monthly reading was livelier, however, registering a 0.8 per cent pickup.
The big mover for Canadian inflation remained energy, particularly gasoline, with gas prices 13 per cent higher last month than they were a year earlier. As well, electricity costs rose 6.4 per cent, car insurance increased 4.8 per cent, restaurant meals 2.7 per cent and home replacement costs 3.6 per cent.
Overall, seven of the eight major indexes tracked by the agency showed an increase in prices, with clothing and footwear the only component where they were lower, by 2.4 per cent, than they were a year ago.
Some individual items showed even greater drops, including computer equipment and supplies, down 10.1 per cent, video equipment, down 10.8 per cent, and women’s clothing, which fell 7.2 per cent.