Falling gasoline prices and automobile costs lead to slowdown
Consumer prices in Canada rose by 2.3 per cent in December from a year earlier following November’s 2.9 per cent increase, according to Statistics Canada.
On a year-over-year basis, prices rose in all eight major components in December.
The falling cost of gasoline was the major contributor to the country’s inflation rate. Looking at the cost year-over-year, gasoline costs rose 7.6 per cent, compared to the previous month’s growth of 13.5 per cent. Car purchases were also less expensive, increasing only by 2.3 per cent in December.
The cost of food also continues to be a major contributor to the country’s falling inflation rate. Consumers paid 4.4 per cent more for food in the 12 months to December following November’s gain of 4.8 per cent.
Consumer prices rose at a slower rate in December in every province except for Prince Edward Island, where the 12-month increase matched the gain the month before at 2.9 per cent.
New Brunswick posted the largest increase at 3.3 per cent, while British Columbia recorded the smallest gain at 1.7 per cent.
Overall, Statistics Canada reported the inflation rate for 2011 as a whole was 2.9 per cent, just within the Bank of Canada’s broad one-to-three per cent range. However, this is the highest average rate in several years.
The Bank of Canada’s core index — or inflation minus the most volatile elements, including energy, some fruits and vegetables, mortgage interest, and tobacco — slowed to 1.9 per cent from November’s 2.1 per cent increase.