Canadian inflation at 2 per cent in April, stronger than expected

Gasoline and transportation costs continue to push inflation up: StatsCan
||Last Updated: 05/18/2012

Canadian inflation was slightly stronger than expected in April, pushed higher partly by gasoline prices, but the annual rate matched the Bank of Canada's target of 2.0 per cent, up from 1.9 per cent in March, Statistics Canada data showed on May 18.

The annual core rate, excluding gasoline, some food and other volatile items, rose to 2.1 per cent from 1.9 per cent. On a monthly basis, total and core inflation rose 0.4 per cent from March.

The median forecast in a Reuters survey of analysts was 1.9 per cent for the annual rates. For the month, the median forecast was 0.3 percent for overall inflation and 0.2 per cent for the core.

Only five of the 24 analysts had predicted overall inflation of 2.0 per cent or higher and none had expected core inflation of at least 2.1 per cent.

A 3.2 per cent rise in gasoline and 1.3 per cent in passenger vehicle prices pushed up the monthly inflation data, but this was tempered by an 8.2 per cent fall in natural gas prices.

Prices for food rose 2.5 per cent in April compared with the same month a year earlier. This rise followed a 2.2 per cent year-over-year increase in March. 

In April, year-over-year price increases in the Atlantic provinces were among the highest in the country. Newfoundland and Labrador posted the largest increase at 3.0 per cent, while Alberta posted the lowest growth at 0.8 per cent in the 12 months to April. The province experienced an increase of 1.7 per cent in March.

South of the border, the U.S. consumer price index remained unchanged with the core rate climbing 0.2 per cent.

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