Inflation holds steady at 2.2% in December

The annual pace of inflation held steady in December as higher energy prices were offset in part by slower growth in the price of fresh vegetables.

Statistics Canada said Wednesday the consumer price index in December was up 2.2% compared with a year ago, matching the year-over-year increase in November.

Energy prices in December were up 5.5% compared with a year ago, while gasoline prices were up 7.4% compared with December 2018 when crude oil prices fell amid a global oversupply.

Excluding gasoline, the consumer price index was up 2.0%, the smallest increase since November 2018.

The year-over-year growth in fresh vegetable prices slowed to 1.5% in December compared with an increase of 7.1% in November.

Statistics Canada said lettuce prices were down 5.0% compared with a year ago when prices rose due to an E. coli outbreak, which required the stock of romaine lettuce in the U.S. to be disposed of, limiting the supply and driving up prices for other kinds of lettuce.

Prices for passenger vehicles in December also rose at a slower pace, rising 1.4% compared with a year ago, compared with a 2.9% increase in November.

The average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures, was 2.10% compared with a revised figure of 2.13% for November.

The inflation report comes ahead of the Bank of Canada’s interest rate decision. The central bank is expected to keep its key interest rate target on hold at 1.75%.

Statistics Canada also reported Wednesday that wholesale sales in Canada fell 1.2% to $63.2 billion in November, as five of the seven subsectors tracked moved lower.

The motor vehicle and motor vehicle parts and accessories subsector posted the largest decrease in dollar terms as it fell 3.3% to $10.7 billion, the fourth consecutive monthly decline.

The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.