Good news as inflation slowing faster than expected

For the second month in a row, Canada’s inflation rate was lower than expected. That’s good news for everyone feeling the pinch of higher costs.

“The Consumer Price Index rose 2.8% on a year-over-year basis in February, down from 2.9% in January. Notable contributors to the deceleration included the indexes for cellular services, food purchased from stores, and Internet access services,” Statistics Canada said in its media release.

Offsetting the deceleration was a year-over-year increase in gas prices, which rose 0.8% in February.

“It’s great to see headline inflation move further within the target range, and core inflation continuing its downward trend. We could see that the market was expecting a slightly higher inflation print, due to gasoline prices rising in February, but grocery store prices have slowed, and short-run core momentum measures are tracking around two percent. That’s going to be welcome news for households,” Canadian Chamber of Commerce Senior Economist Andrew DiCapua said, adding the Bank of Canada will see the latest figure as a signal its fight against inflation is working. “But we shouldn’t expect any moves from the Bank until June. With two more inflation updates, updated surveys on expectations, and a Federal budget, the Bank will want to see the data and build a case for any changes before they present anything to Canadians.”