Canada: Inflation rises in January
February 17, 2021
Consumer prices increased a seasonally-adjusted 0.43% in January over the previous month, accelerating from the 0.07% rise logged in December. January's uptick was the sharpest increase in prices since June 2020. Looking at the details of the release, food prices rose in January after dropping in the previous month and prices pressures for transportation picked up pace. In addition, prices for recreation and culture also gained steam.
Inflation came in at 1.0% in January, up from December’s 0.7%. Meanwhile, the trend pointed down slightly, with annual average
inflation coming in at 0.6% in January (December: 0.7%). Lastly, core inflation ticked up to 1.6% from the previous month's 1.5%.
Commenting on January’s print, Royce Mendes a senior economist at CIBC Economics, noted:
“Headline inflation is likely to continue accelerating from here, with base effects pushing the annual pace above 2% in April and May. That will likely prove temporary and the Bank of Canada will look through those increases. With underlying inflationary trends now seeming even weaker than they did previously, central bankers have every reason to keep stimulating the economy.”