Inflation down in February, Statistics Canada reports

The fight against inflation is working as the Consumer Price Index for February was down 5.2% year over year. That compares to 5.9% in January and is the largest deceleration since April 2020. Lower costs at the pumps and for home energy helped lower the CPI, while the cost of groceries remains high as supply constraints and weather-related production issues is adding to the cost of food.

The global economy is getting back to normal but there’s still a ways to go, says the Canadian Chamber of Commerce Chief Economist Stephen Tapp.

“In this context, the latest Canadian Survey on Business Conditions shows that costs and labour issues remain the biggest near-term obstacles for Canadian companies,” Tapp said the Q1 2023 Canadian Survey on Business Conditions Report. “Even as higher interest rates slow demand, there are a few bright spots. First, while long-standing supply-side bottlenecks for the workforce and supply chains remain elevated, they have eased in recent surveys. This might be
because businesses are taking proactive steps to address these problems, such as raising wages, embracing flexible work options and working with suppliers. Second, while the near-term outlook for sales is clearly subdued, all things considered, most companies remain optimistic about the year ahead, especially larger firms and those in services.”