Statistics Canada released the Consumer Price Index (CPI) for January 2024 on February 20th. In January, it increased by 2.9% compared to the same month last year, following the 3.4% increase in December 2023, but the growth rate slowed. The cause was a significant drop in gasoline prices.
Compared to December’s 1.4% increase, January’s sales decreased by 4.0%. CPI, which excludes gasoline prices, rose 3.2% year-on-year in January, exceeding the Bank of Canada’s target of 3% or less. Food prices also slowed, rising by 3.4% in January compared to 4.7% in December. The slowdown in food prices was widespread, with meat prices at 2.8%, other prepared foods at 4.2%, dairy products at 1.5%, bakery products at 4.0%, and fresh fruit at 1.9%.
Prices of bacon decreased by 8.4%, and prices of shrimp and shrimp products decreased by 3.4%. Elsewhere, airfares and travel tour prices declined. Airfares fell further by 14.3% in January, compared to a 9.7% decline in December. However, airfares typically fall in January, when high demand during the year-end and New Year holidays subsides, authorities said.
Of the eight price index items, housing prices were the only one that increased. It was 6.2% in January, up from 6% in December. Prime Minister Justin Trudeau, speaking at a press conference in Vancouver, British Columbia, called it a “good sign” that inflation was coming under control.
He expected the Bank of Canada to make its own decision on whether to lower interest rates going forward.
The current Bank of Canada policy interest rate is 5%.