Canada Inflation Rate Increases to 2.4%

Discussion in 'Economics' started by Kassz007, Jan 25, 2011.


    "...gains in gasoline, electricity and automobile insurance were tempered by a decline in clothing costs."

    "Consumer prices rose 2.4 percent in December after a 2 percent gain in November, Statistics Canada said today. The core rate, which excludes eight volatile items such as gasoline, quickened to 1.5 percent from 1.4 percent."

    "For overall inflation, we might see further gains because of fuel costs. Outside of that, other areas seem subdued."

    "On a monthly basis, overall consumer prices were unchanged in December after a 0.1 percent gain the previous month. The core rate fell by 0.3 percent in December"

    "There is still a fair amount of idle capacity in the economy to keep most price increases well-anchored."

    The major thing I am taking out of this report is the fact that inflation is mostly flat with the exception of gasoline prices. Given the high value of CAD relative to USD at the moment, and the relative stability of inflation, I don't see any major changes in the BOC's plan to raise rates in the second half of 2011.

    Inflation seems to be on track for the most part, although keeping a close eye on oil prices is always a must.