Canada’s annual inflation rate rose for the second consecutive month in February, as higher prices on gasoline and food pushed the cost of consumer goods in Canada up one notch to 2.6 per cent.
As well, core inflation – the underlying pressure on consumer goods, excluding volatile items such as energy and fresh foods – rose two notches to 2.3 per cent, above the Bank of Canada’s 2-per-cent target line.
“On a monthly basis and before seasonal adjustment, consumer prices went up 0.4 per cent in February, after increasing the same amount in January,” Statistics Canada said in its report.
Following a two-tenths pop in January, the first two months of 2012 reverses what had been a generally downward trajectory in inflation that began last May.
While unlikely to be seen as permanent, the upward trend could cause some rethinking at the Bank of Canada, which had been expecting inflation to continue falling.
Statistics Canada said the big mover in the past two months has been gasoline, which is exerting upward pressure on most energy prices and transportation costs. Gas prices rose by 2.6 per cent over January and were 8.9 per cent more than a year ago.
Middle East turmoil and uncertainty over supply has caused the price for world oil to stay well north of the $100 US level, despite what remains a generally weak global economic backdrop.
Meanwhile, the cost of food continued to rise faster than inflation overall – it was 4.1 per cent higher than a year ago, as the cost of meat rose 7.1 per cent and bread by 7.2 per cent.
Other items that saw price increases included shelter, household operations, clothing and footwear, transportation, health and personal services, and alcoholic beverages and tobacco.
Of the eight major components tracked by the agency, only recreation, education and reading saw a pull-back in prices from a year ago.
Regionally, Quebec and Ontario both experienced significant increases in annual inflation. Prices rose by four-tenths of a point to 3.2 per cent in Quebec, thanks to a 13.4 per cent pop in gas, while Ontario’s rate rose half a point to 2.9 per cent as electricity costs rose 8.9 per cent.
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