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 per cent compared with a year ago, matching the year-over-year increase in November.
Locally, the inflation rate in Ottawa reached 2.7 per cent last month, up from 2.5 per cent in November.
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Across the country, energy prices in December were up 5.5 per cent compared with a year ago, while gasoline prices were up 7.4 per cent compared with December 2018, when crude oil prices fell amid a global oversupply.
Excluding gasoline, the consumer price index was up 2.0 per cent, the smallest increase since November 2018.
The year-over-year growth in fresh vegetable prices slowed to 1.5 per cent in December compared with an increase of 7.1 per cent in November.
Statistics Canada said lettuce prices were down 5.0 per cent 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. They climbed 1.4 per cent compared with a year ago, compared with a 2.9 per cent increase in November.
TD Bank senior economist Brian DePratto said it was steady as she goes for consumer price growth in December as energy prices masked a more modest month of yearly price gains.
“As has been the case for the latter half of last year, the fairly staid performance of the Bank of Canada’s measures, together with headline prints suggest that the underlying pace of inflation remains pretty much on the Bank of Canada’s two per cent target,” DePratto said.
“We continue to look for a slight moderation in the pace of headline inflation as year-ago energy price comparisons normalize, but expect price gains to remain around the two per cent mark.”
The average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures, was 2.10 per cent compared with a revised figure of 2.13 per cent for November.
The inflation report came ahead of the Bank of Canada’s interest rate decision which saw the central bank keep its key interest rate target on hold at 1.75 per cent.
In its monetary policy report, the central bank said it expected inflation this year to come in at 1.9 per cent, a touch higher than then 1.8 per cent it forecast in its earlier forecast.
Statistics Canada also reported Wednesday that wholesale sales in Canada fell 1.2 per cent 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 per cent to $10.7 billion, the fourth consecutive monthly decline.
