inflation continued to slow in december
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Inflation continued to slow in December

Canada still has some work to do to bring its inflation rate down to the Bank of Canada’s target of two per cent, but it slowed last month.

Statistics Canada’s Consumer Price Index report for December shows an acceleration in mortgage interest costs, clothing and footwear, and personal care supplies and equipment. However, there was some relief at the gas pumps and the grocery store.

Overall, the national inflation rate in December was 6.3 per cent, down 0.6 per cent compared to November, the most substantial decrease since April 2020. Excluding food and energy costs, it was 5.3 per cent.

File photo courtesy of © Can Stock Photo / Elenathewise

Those who drive paid 13.1 per cent less last month than they did in November, as concerns about a global recession and lower demand in China pushed the price of crude oil down 14.8 per cent from the month before. While Canadians still paid 3 per cent more for gas than they did a year ago, December’s drop was the biggest the pandemic settled in and became a part of our routine.

The cost of buying new household appliances came down 4.7 per cent after a 5.3 per cent jump in November, and furniture cost 6.4 per cent less than a year ago as supply chain pressures eased and shipping costs dropped.

Improvements in the supply chain also lowered the sticker price on new vehicles. That cost fell 7.2 per cent as demand for used cars and trucks also decreased.

In your grocery cart, the rising cost of food items was 11.1 per cent, slightly less than the 11.4 per cent rate of inflation posted in November. There was a deceleration for non-alcoholic beverages, bakery products, coffee and tea, and preserved food products.

inflation continued to slow in december 1

Inside the Farm Boy grocery store on Wellington Rd. in London.

However, eating healthy still cost more than ever. Fresh vegetable prices rose 13.6 per cent because of poor weather in growing regions. Prices were up 11.2 per cent in November.

Compared to the rest of the G7 countries, Canada’s inflation rate remains in the middle. Last month, Italy reported the highest rate at 11.6 per cent. The United Kingdom had the second highest at 10.9 per cent, and Germany’s rate was 9.6. The American rate was slightly higher than Canada’s at 6.5 per cent. France’s rate was 5.9 per cent, and 3 per cent in Japan.

The Consumer Price Index helps the Bank of Canada set interest rates. It will provide another update on January 25 after boosting its key lending rate by half a percentage point on December 7 to 4.25 per cent.

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