The latest batch of inflation data contains some promising signs that inflation may be behind us soon enough, but in some areas of the economy, prices are still going up.
What’s new: Canada’s consumer price index (CPI) showed prices increasing by 5.2% in February since the previous year, down from a 5.9% jump in January. Month-over-month, prices rose 0.4%.
- Childcare costs were down significantly by 27.5% due to the rollout of daycare subsidies for working parents.
- Energy prices also fell 0.6% from 2022, and gasoline fell 4.7%, the first year-over-year price drop since January 2021.
Yes, but: Inflation is proving to be stubborn in some pretty important parts of the economy, like food and shelter.
- Mortgage interest costs saw the highest 12-month percentage change, increasing 23.9%. This increase has been driven mainly by the Bank of Canada (BoC) raising interest rates, making borrowing more expensive.
- Food prices rose 10.6% year-over-year. Lettuce, in particular, saw a 20.2% increase last month, and produce, poultry, milk and alcohol prices all ticked up.
Why it matters: BMO’s chief economist Douglas Porter said the new inflation data is “mildly encouraging,” but it looks as though staples like rent and food prices will be the last to see inflation get back under control—budget accordingly!