MNI 5 Things: Canada Jan CPI Dips But Core Keeps Upward Trend>

By Yali N'Diaye

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

data on the Canadian Consumer Price Index released Friday by Statistics 

Canada: 

     - Headline unadjusted CPI rose 0.7% on the month, more than the 

0.5% increase expected by analysts, with all major components up except 

clothing and footwear (-0.8%). This was the largest monthly increase in 

a year. 

     - On a 12-month basis, CPI rose 1.7%, more than the 1.5% increase 

expected by analysts, but still a dip from 1.9% in December, bringing 

total CPI away from the Bank of Canada's 2.0% target. 

     - But the BOC had already anticipated total inflation to ease in 

January, with a strong base effect. Therefore the BOC will likely pay 

more attention to the core measures of inflation, which showed the 

upward trend continued, consistent with the fact that the output gap is 

virtually closed and the labor market slack is being absorbed. 

     - The range of three BOC's preferred measures of underlying 

inflation edged up to 1.8%-1.9% from 1.6%-1.9% in December. CPI-common 

picked up to 1.8% from 1.6%, the largest gain since April 2012. CPI-trim 

and CPI-median were steady at 1.8% and 1.9%, respectively. 

     - Gas prices (+3.2%) and telephone services (+6.5%) were the top 

upward contributors to January monthly CPI. Gasoline was also the top 

contributor to the 12-month gain. Seasonally adjusted CPI picked up to 

0.5% on the month from 0.1% in December, and was up 0.2% excluding food 

and energy, the same as the previous month. 

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

[TOPICS: M$C$$$,MACDS$]