Canadian Consumer Price Index (February 2020)

James Marple, Senior Economist | 416-982-2557

Date Published: March 18, 2020

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Canadian inflation slowed to 2.2% in February

  • The consumer price index rose 2.2% year-on-year in February, slightly ahead of market expectations for 2.1%.
  • Adjusting for seasonality, consumer prices rose 0.1% month-on-month, the same pace as January. 
  • Most categories saw price growth slow in February. Led by energy, goods prices slowed to 2.1% from 3.1% in January. Services prices bucked the trend accelerating to 2.2% (from 1.8% in January).
  • The Bank of Canada's core inflation measures were mostly unchanged. CPI-common remained at 1.8% and CPI-median at 2.1%. CPI-trim edged down to 2.0% from 2.1%.

Key Implications

  • The COVID-19 outbreak is likely to show up dramatically in inflation data in the months ahead, most obviously in the sharp drop in energy prices. Airlines, which have been effectively shut down due to the pandemic will be another area to monitor. Some other areas, where consumers have front-loaded purchases and where shortages have appeared, may see a pickup in price growth, though this should prove temporary.
  • Fighting the immediate economic fallout from the COVID-19 pandemic is job number one for the Bank of Canada. Movements on the inflation front will be useful in gauging this, but are unlikely to be of primary importance. 

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