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Canada’s Inflation Rate Rose To 3.4% In December

Canada’s inflation rate rose an annualized 3.4% in December, up from 3.1% in November.

Statistics Canada said that the Consumer Price Index (CPI) accelerated in December mostly because of higher year-over-year prices for gasoline, which increased 1.4% in the month after declining 7.7% in November.

However, gasoline prices rose because of what’s known as a “base-year effect,” which is when gasoline prices fell more on a monthly basis a year earlier, in December 2022.

Excluding gasoline prices, inflation in Canada declined to 3.5% year-over-year in December from 3.6% in November of last year.

On a monthly basis, inflation in Canada fell 0.3% during December after gaining 0.1% in November. That was the biggest monthly decline since December 2022.

Other prices that rose in December included airfares, passenger vehicles, and rent. Prices for food purchased from stores rose 4.7% year-over-year in December, matching November’s gain.

Helping to offset those increases were lower prices for travel tours, which declined 18.2%.

Regionally, inflation rose fastest in Atlantic Canada during December. This was because fuel oil is more commonly used for heating homes in the Maritime provinces, contributing to price growth in that region.

Both the yearly and monthly inflation data for December matched the consensus expectations of economists who were polled by Bloomberg Markets.