Slumping gas prices continue to be a drag on Canada’s annual inflation rate, which slowed to 1.0 per cent in January, Statistics Canada said Thursday.
The reading followed a rise of 1.5 per cent in December, which was also a deceleration from the previous month. Economists had expected the rate for January to come in at 0.7 per cent, according to Thomson Reuters.
Gas prices in January were at the lowest they’ve been since April 2009, the federal statistical agency said. Prices at the pump fell 26.9 per cent in January compared with the previous year.
Most of that drop has occurred within the last six months. Since June 2014, Statistics Canada says gas prices have fallen 33.9 per cent.
The fall in oil prices has dragged down the Canadian dollar. The Conservative government has put off its federal budget — typically released in February or March — until at least April to get a better sense of how the slump in oil prices might affect Canada’s books.
Cheaper gas also counterbalanced rising prices in seven of the eight categories in the agency’s report.
Statistics Canada says higher food prices and shelter costs led January’s overall rise in the consumer price index.
The cost of food rose 4.6 per cent in January compared to the previous year, while shelter costs rose 2.0 per cent on an annual basis.
Consumer prices fell in the Atlantic provinces in January compared to a year earlier. The biggest decline was in Prince Edward Island, where prices were down 1.9 per cent.
Ontario posted the largest consumer price increase of all the provinces, up 1.6 per cent from the previous year, in part because of the higher cost of natural gas, clothing and homeowners’ insurance.
Core inflation, the number the Bank of Canada closely monitors and which excludes some items from the volatile energy and food categories, rose by 2.2 per cent, just as it did in December. Economists had expected a rise of 2.1 per cent.
On a seasonally-adjusted basis, the consumer price index was down 0.2 per cent in January, matching the drops in December and November.