Statistics Canada reveals a marginal increase in consumer prices in February

Statistics Canada releases its monthly report on consumer prices on Wednesday. The data suggested the Canadian consumer price index (CPI) to have marginally increased in February on a monthly basis despite the Coronavirus emergency that is threatening to push the global economy into recession.

Statistics Canada revealed consumer prices to have surged by 0.4% in February. In January, Canadian CPI was capped at a slightly lower 0.3%. Wednesday’s data came in line with what the economists had forecast for February.

On a year over year basis, consumer prices in Canada posted a 2.2% increase in February. January’s report had recorded a 2.4% increase in consumer prices as compared to the same month last year.

Core-CPI Posts A 2.0% Growth In February On A Year Over Year Basis

Excluding volatile components like gasoline, the so-called core-CPI climbed 0.7% in February versus a 0.4% growth that was recorded in January. The core-CPI registered a 2.0% growth in February as compared to the same month last year.

Chief Economist Douglas Porter of the Bank of Montreal commented on Wednesday’s data and reiterated that February’s report accounts for the sharp slump in global oil prices but the broader impact of Coronavirus pandemic is yet to reflect in the economic data. In the subsequent months, he added, headline inflation can be expected to fall steeply below the 2% annual inflation target of the Bank of Canada (BoC).

According to Porter, the Canadian economy is likely to take months before the headline inflation recovers back to near the BoC’s annual inflation target. Economists had anticipated the Canadian CPI to print a 2.1% growth in February as compared to a year ago.

7 Out Of 8 Primary Components Posted YoY Increase In Consumer Prices In February

On a year over year basis, consumer prices were reported to have gained in 7 out of a total of 8 primary components that the Statistics Department tracks. The overall increase in the CPI in February was largely attributed to the shelter (2.3% YoY growth) and transportation (4.4% YoY growth) prices, as per Statistics Canada.

Household operations, equipment, and furnishing, on the other hand, posted a 0.2% decline in prices in February.

The forex market remained volatile on Wednesday. Loonie (Canadian dollar) opened at 1.4165 on Wednesday and posted a daily low of 1.4650 against the greenback. Part of the loss, however, was reported to have been recovered later in the day with the USD/CAD currency pair dropping back to around 1.4351 level. At the time of writing, USD/CAD is stabilizing around 1.4415.