Canadian January consumer price index data
- Prior was +1.7% y/y
- CPI +0.6% m/m vs +0.4% expected
- Prior m/m 0.7%
Core measures:
- CPI common y/y +1.9% vs +1.9% expect. Was 1.8% last month
- CPI trim +2.1% vs +1.8% prior (and 1.4% before that)
- CPI median +2.1% vs +1.9% prior
- Average of the three measures was 2.03%, the highest since Feb 2012
- Services inflation +2.6%
- Goods inflation +2.6%
These are some big misses and the Canadian dollar is sharply higher. The Bank of Canada will want to have a close look at these numbers but this is the kind of thing to ring the alarm bells over.
Looking deeper, gasoline, cars and mortgage interest were main contributors to the rise in inflation with minimum wage increases in January perhaps passing through to restaurants where prices were up 4% y/y.
In general, you have to wonder if the minimum wage hikes were underpriced. That would be seen as more of a one-off than continuing pattern. Then again, it could also show that businesses thought consumers could swallow price hikes. Sequentially, Ontario prices were up 0.9% m/m in January and 0.6% in February.
