An increase in measurement follows October and November’s 3.1% stability.
Statistics Canada released data on Tuesday showing that in December, Canada’s annual inflation rate increased to 3.4%.
That comes after inflation remained stable in October and November at 3.1% when compared to the prior year.
According to StatsCan, the cost of gas, airfare, passenger cars, and rent increased the number in December.
The retail price of food increased by 4.7% from the previous year, which is the same rate of increase as November.
As per Doug Porter, chief economist at Bank of Montreal, there is no reason to be surprised by the most recent measurements of the consumer price index.
“That’s a big improvement from where we were a year ago,” he stated. “But it’s still just a little bit too high for comfort.”
Porter observed that spending on “discretionary spending” may be declining among Canadians, with travel and tour spending particularly declining as well as some categories of recreational spending.
There’s a hint of subtle tenderness visible. Although not nearly as much as they might have a year or two ago, people are still willing to spend there, according to Porter.
Inflation decreased compared to November without gasoline.
The federal statistics agency noted in its release that the headline inflation rate of 3.4% was “primarily the result of higher year-over-year gasoline prices in December.”
Although StatsCan reports that when comparing December 2023 to the previous month directly, gas prices decreased, they had already decreased significantly in December 2022.
This results in an effect known as the “base-year effect,” wherein a greater discrepancy may be seen when comparing current and previous year’s data. This effect is partially responsible for many economists’ predictions of inflation figures that closely matched those that were announced today.
The 3.1% inflation rate in Canada remains stable.
According to Statistics Canada, the consumer price index for December would be 3.5%, which is even higher than the headline figure released today if gas prices were taken out.
However, compared to November, December’s inflation minus gasoline was lower.
