- The consumer price index rose up 1.5% from year-ago levels in February, a tick above the median consensus forecast for price growth to remain steady at 1.4%.
- Food price growth accelerated to 3.2% year-on-year (from 2.8% in January) while clothing and footwear rose to 1.6% (from 0.5%). Energy prices remained in negative territory (-5.7%), but moved up from -6.9% in January.
- More broadly, goods price inflation pushed into positive territory (+0.6% y/y), but service price growth slowed (to 2.3% from 2.7% in January).
- On a seasonally-adjusted basis, prices were up 0.2% month-on-month. Gains were relatively broad-based with only household operations pulling back in February (-0.3%).
- Core inflation measures were mostly unchanged with both CPI-median and CPI-trim steady at 1.8% and 1.9% respectively. The CPI-common measure edged down to 1.8% from 1.9%.
Key Implications
- The slight firming in inflation in February does little to change the broader picture of price growth that is neither too hot, nor too cold.
- Core inflation has now been modestly below 2% since August of last year. Its relative stability suggests little need for a change in policy in either direction. If anything, the slight move down in the CPI-common measure reinforces the view that the Bank of Canada is likely to remain on hold (perhaps) indefinitely.
