The slower pace of growth in headline CPI was due to a base-year effect, StatCan said, which refers to the impact that price movements from a year ago have on the current month’s calculation.
Although gas prices rose 2.9% year-over-year in January, and were up 4.7% from December, a 7.9% annual decline in the cost of cellular services and an easing of passenger vehicle prices kept inflation at bay. Grocery prices proved unrelenting, rising 11.4% year over year in January to match a 40-year high. The increase was driven in part by a 7.3% yearly jump in the cost of meat, which was up from 6% in December. Annual acceleration was also seen in the cost of bakery products , fresh vegetables , and dairy products .
“Today’s CPI represents a rare downside surprise in both headline and core inflation, clearly a big step in the right direction,” Porter said.