Canada: Inflation comes in at highest level since June 2024 in February
Latest reading: Inflation came in at 2.6% in February, up from January’s 1.9%. February’s figure represented the highest inflation rate since June 2024, and was well above market expectations. Looking at the details of the release, food and clothing prices rose in February after dropping in the previous month. The end of a temporary tax break was largely behind the bump in inflation in February.
The trend was unchanged, with annual average inflation coming in at January’s 2.3% in February. Meanwhile, core inflation rose to 2.7% in February from January’s 2.1%.
Finally, consumer prices increased 1.05% from the previous month in February, picking up from the 0.06% rise seen in January. February’s uptick was the sharpest increase in prices since May 2022.
Panelist insight: Desjardins’ Randall Bartlett said:
“With the drag from the GST/HST holiday starting to come out of CPI numbers in February, inflation is likely to track higher again in March when it is entirely in the rearview mirror. […] The impact of counter tariffs and the weaker Canadian dollar should apply consistent upward pressure to inflation even as the economy slows. But this will now be offset by lower energy prices starting in April 2025 as a result of the elimination of the federal price on pollution.”