MNI 5 THINGS:Canada Dec CPI -0.1% M/M, 2.0% Y/Y,Above Expected>

By Courtney Tower

     OTTAWA (MNI) - The following are the key points from the December 

data on the Canadian Consumer Price Index released Friday by Statistics 

Canada: 

     - Headline unadjusted CPI fell 0.1% in December from November, a 

stronger monthly result than the 0.4% decline expected by analysts in a 

MNI survey. The 12-month inflation rate rose to 2.0% from 1.7%, topping 

analysts' forecasts of a 1.7% gain. For the fourth quarter of 2018, CPI 

was 2.0% year-over-year on average, matching the Bank of Canada's 

projection. 

     - On a monthly basis, goods prices dropped 0.7% (+0.2% on the year) 

with durable goods declining 0.3%, semi-durable goods down 2.8% and 

non-durable goods down 0.3%. Gasoline prices dropped 6.5%. As a result, 

CPI excluding gasoline rose 0.2% on the month and 2.5% year-over-year, 

the largest 12-month increase since October 2014. Services, on the other 

hand, rose 0.5% on the month and +3.5% year-over-year, the largest 

12-month gain since August 2008. Air transportation and mortgage 

interest costs were top upward contributors to the monthly and 12-month 

gains in services. 

     - Year-over-year, all eight major components rose, the largest 

contributor being shelter (+2.2%). The price of energy products 

continued to decline (-3.7%), with consumers paying 8.6% less for 

gasoline than in December 2017. Gas prices were the largest downward 

contributor. Air transportation (+28.1%) and mortgage interest costs 

(+7.5%) were the two top positive contributors year-over-year. 

     - On a seasonally adjusted monthly basis, the CPI rose 0.2% in 

December after a 0.1% decline in November. The largest increases came 

from food (+0.6%) and health and personal care (+0.6%). The only decline 

among the eight main indices was in transportation (-0.1%). CPI 

excluding food and energy rose 0.4% on the month. 

     - The average annual CPI increase was 2.3% in 2018 versus gains of 

1.6% in 2017 and 1.4% in 2016. The 2018 gain was the largest since 2011. 

Gasoline prices were the largest upward contributor to the 2018 annual 

average increase. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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