Inflation falls in February despite surge in grocery prices

The latest Consumer Price Index from Stats Canada has provided a good news, bad news look at February.

The pinch of inflation loosened last month, as the index rose 5.2 per cent in February as compared to the year before, versus a 5.9 per cent rate in January. Stats Canada said the 0.7 percentage point dip is the biggest since April 2020.

Price increases have remained stable, rising 4.8 per cent year-to-year in February, excluding food and energy. Prices were up 4.9 per cent in January compared to 2022.

The decline in inflation, though, has not eased people’s pain at the grocery store, as grocery prices rose 10.6 per cent year-to-year.

“Continuing to put upward pressure on grocery prices are supply constraints amid unfavourable weather in growing regions, as well as higher input costs such as animal feed, energy, and packaging materials,” read the notice from Stats Canada.

It is costing a lot more for breakfast cereal, as the price of cereal products was up by 14.7 per cent in February. Fish and seafood were up 7.4 per cent, with sugar and confectionary products up an even six per cent.

There was encouraging news on energy, as an increased supply resulted in a 0.6 per cent year-to-year fall in prices for February. That was led by a decline in gasoline. At 4.7 per cent, it was the first year-to-year drop in gas prices since January 2021. Canadian drivers paid one per cent less in February to fill their tanks, thanks, in part, to increased U.S. crude inventory.

In Ontario, prices rose 5.1 per cent year-to-year in February, down from 5.6 per cent in January.

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