The latest release of the Consumer Price Index (CPI) for January 2024 by Statistics Canada provides insights into the changing dynamics of consumer prices in the Canadian economy.
In January 2024, the CPI recorded a 2.9% increase year-over-year, marking a slight deceleration from the 3.4% gain witnessed in December. Notably, lower gasoline prices played a significant role in this slowdown, with prices dropping by 4.0% compared to December’s 1.4% increase. Excluding gasoline, the headline CPI moderated to 3.2% year over year, down from December’s 3.5% growth.
Gasoline Prices Decline: Gasoline prices experienced a notable decline, falling by 4.0% in January following a 1.4% increase in December. This decrease can be attributed to a base-year effect, with January 2023 seeing a surge in prices due to refinery closures caused by Winter Storm Elliott.
Grocery Prices: While grocery prices remained elevated, their growth rate slowed down in January (+3.4%) compared to December’s rate (+4.7%). Various grocery items, including meat, dairy products, bakery products, and fresh fruit, contributed to this deceleration, although certain items like soup, bacon, and shrimps witnessed price declines.
Airfares: Prices for airfares registered a decline in January (-14.3%) compared to December (-9.7%) on a year-over-year basis. This decrease is typical for January as holiday demand subsides. Additionally, on a monthly basis, airfare prices fell significantly (-23.7%) compared to December.
Cellular Services: The cost of cellular services saw a year-over-year decline of 16.4% in January, albeit at a slower rate than December’s 26.8% decrease. However, on a monthly basis, prices rebounded, rising by 6.7% compared to December, as promotions from the preceding months tapered off.
In terms of regional highlights, prices rose at a slower pace in January compared to December in nine provinces, indicating varied inflationary pressures across different regions of Canada.
While overall inflation moderated slightly, driven by declines in gasoline and airfare prices, certain sectors like groceries continued to see elevated prices, albeit at a slower pace of growth.