Inflation Cools as Gasoline Prices Drop

Lower gasoline prices are getting much of the credit for a reduction in the annual inflation rate in February.

Statistics Canada says the annual inflation rate last month was 2.2 per cent, down from the 2.8 per cent annual rate posted in January and also below the consensus estimate of economists for a 2.4 per cent rate.

Gasoline prices fell 6.8 per cent between January and February, after rising sharply in January. However, gasoline was still 7.4 per cent more expensive in February than a year ago.

The agency says consumers also paid more last month for cars, natural gas and homeowner replacement costs. Natural gas prices were 17 per cent higher compared to a year ago, with increases ranging from 4.6 per cent in Alberta to 22.7 per cent in Ontario.

Home heating oil prices rose an average 13.7 per cent.

Lower prices for auto insurance, computers and women's clothing helped offset the increases.

The core annual inflation rate, which strips out 8 volatile items such as food and energy, was unchanged at 1.7 per cent.

OttawaBusinessJournal