Statistics Canada reported on Wednesday the country’s consumer price
index (CPI) fell 0.1 percent m-o-m in December, following an unrevised 0.2
percent m-o-m advance in the previous month. This represented the first monthly
decline in CPI since December 2020 (-0.2 percent m-o-m).
On a y-o-y basis, Canada’s inflation rate climbed 4.8 percent last
month, accelerating from an unrevised +4.7 percent in November. This represented
the highest inflation rate since September 1991 (+5.5 percent).
Economists had predicted inflation would edge down 0.1 percent m-o-m but
surge 4.8 percent y-o-y in December.
According to the report, all eight major components of the headline CPI demonstrated
increases on a year-over-year basis in December, led by transportation (+8.9
percent y-o-y), which, in its turn, was driven by a surge in gasoline prices (+33.3
percent y-o-y). It was followed by the shelter (+.54 percent y-o-y) and the food
(+5.2 percent y-o-y) components.
Meanwhile, the closely watched the Bank of Canada's core index jumped 4.0
percent y-o-y in December, following an unrevised 3.6 percent y-o-y increase in
November. This was the highest reading since September 1989. Economists had
forecast an advance of 3.5 percent y-o-y.
In 2021, Canada’s CPI rose 3.4 percent on an annual average basis,
quickening sharply from +0.7 percent in 2020. This marked the steepest inflation
rate since 1991 (+5.6 percent).