Newspaper article The Canadian Press

Canada's Inflation Rate Strengthens to 1.9% as Gasoline Prices Bounce Back

Newspaper article The Canadian Press

Canada's Inflation Rate Strengthens to 1.9% as Gasoline Prices Bounce Back

Article excerpt

Canadian inflation firms up, rises 1.9%


OTTAWA - Canadian inflation accelerated last month as fresh strength in gasoline prices removed a large amount of downward pressure on the rate, according to a new report Wednesday from Statistics Canada.

The agency's consumer price index increased 1.9 per cent in March, up from a two-month stretch that delivered weaker readings of 1.5 per cent in February and 1.4 per cent in January.

The average of Canada's core inflation numbers, considered better measures of price pressures, rose two per cent in March -- edging up from 1.9 per cent in February. They omit more-volatile items like gasoline and are closely watched by the Bank of Canada.

The firmer inflation picture brings both gauges closer to the central bank's ideal two per cent target, and comes as the economy works through a soft patch brought on by the drop in crude-oil prices at the end of last year.

Before cheaper pump prices weighed on the numbers in recent months, higher gas prices had been a major driver of inflation through much of 2018.

Statistics Canada said the March rebound in the global cost of crude oil pushed gas prices up 11.6 per cent, month-over-month. Gas prices, however, were still 4.4 per cent lower last month compared with March 2018.

"With gasoline it's easy come, easy go... Now, we're back to paying higher prices for gasoline and it has inflation still, even with that, running around two per cent," CIBC chief economist Avery Shenfeld said in an interview.

"You can worry a lot about the decimal places in inflation from month to month, but the story is that inflation is right where the Bank of Canada wants it to be."

The March reading, which was in line with economists' predictions, reinforced expectations the Bank of Canada will leave its key interest rate unchanged at its policy announcement next Wednesday and possibly for the rest of the year.

Year-over-year, Statistics Canada said consumers paid 15.7 per cent more in March for fresh vegetables, 8.1 per cent more on mortgage borrowing costs and 5. …

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