Excluding energy and food costs – which are the two expenditure items most affected by inflation – prices rose by 5.3% in December 2022 compared to the same period in 2021.
Although the rise in prices remains strong in the country, it nevertheless eased in December, according to analysts at Statistics Canada.
A slowdown largely attributable to a 13.1% drop in fuel prices at the pump in December compared to November, in particular due to a drop in the price of crude oil in the context of a global economic slowdown and of a COVID-19 outbreak that has affected China’s economy.
2020, says Statistics Canada. Year over year, gasoline prices rose 3% in December after increasing by13,7% in November.”,”text”:”This is the steepest monthly decline since April 2020, says Statistics Canada. Year-over-year gasoline prices rose 3% in December after rising 13.7% in November.””>This is the steepest monthly decline since April 2020, says Statistics Canada. Year over year, gasoline prices rose 3% in December after rising 13.7% in November.
In addition to gasoline, the price of heating oil decreased by 14.8% during the same period.
Slight slowdown in the increase in the grocery basket
Also very affected by inflation, the price of the grocery basket also saw some respite in December.%) compared to November (+11.4%)”,”text”:”Year-over-year, prices for food purchased from stores slowed slightly in December (+11%) compared to November (+11.4%)”}}” >Year-over-year, prices for food purchased from stores slowed slightly in December (+11%) compared to November (+11.4%)notes Statistics Canada.
However, this slowdown was offset by higher prices for fresh vegetables, which cost 13.6% more in December after rising 11.2% in November, still on an annual basis.%) and other fresh vegetables (+11.7%), due to unfavorable weather conditions observed in producing regions”,”text”:”An acceleration in the pace of price growth was widespread for vegetables, including tomatoes (+21.9%) and other fresh vegetables (+11.7%), due to unfavorable weather conditions observed in the producing regions”}}”>An acceleration in the pace of price growth was widespread for vegetables, including tomatoes (+21.9%) and other fresh vegetables (+11.7%), due to unfavorable weather conditions observed in producing regionswe learn in The Daily of this morning.
Year-over-year, grocery price growth has hovered around 11% in Canada over the past 5 months.
In addition to food, the growth in the price of durable goods – such as household appliances – also slowed last month, falling on an annual basis from 5.3% in November to 4.7% in December. This is the third straight monthly slowdown in the durable goods category.
Among the things that rose fastest in December, Statistics Canada reports increases in mortgage interest rates, the price of clothing, footwear and personal care items which rose 9.9% year to year. The most marked increase in the price of this type of product since February 1983, underlines the federal agency.
Soft landing
After reaching an annual high of 8.1% last Junel’IPC had basically stood still all fall. Inflation was 6.9% in September and october before dropping to 6.8% in november and 6.3% in December. Since peaking in June, inflation has eased by 1.8 percentage points over the past seven months.
The Bank of Canada will be watching the data released Tuesday morning closely. The central bank raised its key rate seven times in 2022, taking it to 4.25% in December. The Bank of Canada is trying to bring annual inflation back to a range of 1 to 3%.
It is due to announce its decision on the change in its key rate next week.
In December, the central bank argued that inflation is still too high and short-term inflation expectations remain high. And the longer consumers and businesses expect inflation to stay above target, the more entrenched high inflation is likely to be.
she wrote at the time to justify her decision.
It should be noted that increases in the key rate – the Bank of Canada’s main remedy against inflation – do not have immediate effects on the economy. It often takes months to measure the true impact.
In the survey of consumer expectations released Monday by the Bank of Canadawe also learned that the surge in inflation in recent months and the successive hikes in interest rates have prompted Canadians to reduce their spending and to postpone major purchases.