Consumer costs in April increased 3.3 per cent compared to this time last year, according to Statistics Canada. This matches last month’s inflation rate, but is slower than the prior month-over-month jump of 1.1 per cent.
Economists had been expecting the rate to increase by 3.4 per cent.
The Bank of Canada seeks an inflation rate of between one and three per cent. Until March, Canada had not exceeded the target inflation range since September 2008
Once again, energy costs have been the driver of higher prices, increasing 17.1 per cent in the 12 months to April and up 4.9 per cent from last month. Gasoline was 26.4 per cent higher over the year in March. Prices for fuel oil and other fuels increased 32.4 per cent, while electricity prices rose seven per cent.
The transportation component saw the largest increase, where prices rose 8.3 per cent in the 12 months to April. This is after a 6.6 per cent increase in March.
Food prices dropped 0.2 per cent from last month, but overall rose 3.3 per cent in the 12 months to April, which is the same rate as last month. Prices for fresh vegetables rose 4.3 per cent, which is substantially less than last month’s increase of 18.6 per cent.
Among major components, alcohol and tobacco prices rose 2.4 per cent over the year to April, slightly less than last month’s 2.5 per cent increase. Clothing and footwear prices fell by 1.1 per cent in the 12 months to April after having its first increase last month, which was the first year-over-year increase since November 2009.
The bank’s core index — or inflation minus the most volatile elements, including energy, some fruits and vegetables, mortgage interest, and tobacco — fell slightly, returning only a 1.6 per cent increase, compared to last month’s 1.7 per cent increase.
The largest increase in consumer prices was observed in Nova Scotia for the third month in a row. The province saw a 4.2 per cent increase compared to last month’s 3.9 per cent increase.
The smallest increase was experienced in Iqaluit with prices averaging only 1.3 per cent higher than a year ago.
In the United States, the rate of inflation stands at 3.2 per cent, up from last month’s increase of 2.7 per cent. This is the biggest 12-month jump since October 2008, according to the U.S. Labor Department. Energy and food prices continue to be the principal source of the increase.
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