Rob Roach, ATB ECONOMICS | February 21, 2023

Headline inflation eased in January

Consumer prices in Canada were 5.9% higher in January 2023 than they were 12 months earlier.

This is still a high rate of price growth, but it is an improvement over the 6.3% rate posted in December 2022.

At 5.0%, headline inflation in Alberta was a full percentage point lower in January 2023 than it was in December 2022.

The cost of food at grocery stores and restaurants in Alberta, however, was 10.5% higher on a year-over-year basis. The increase was essentially the same nationally at 10.4%.

On a more positive note, energy costs in the province were lower than 12 months earlier, with gasoline prices down by 6.4% and electricity prices down by 47.9%.

Gasoline prices were 2.9% higher in the country as a whole while electricity prices were 1.3% lower.

While there is still a long way to go before headline inflation is back within the target range of 1%-3%, we are expecting the Bank of Canada to keep its trendsetting policy interest rate at its current level of 4.5% as long as price growth continues to ease.

Answer to the previous trivia question: Buckingham Palace has 75 rooms including 78 bathrooms.

Today’s trivia question: How much did a loaf of bread in Berlin, Germany that cost 4 marks at the end of 1922 cost by late 1923 due to hyperinflation?