Consumer prices in Alberta showed the highest annual increase in October than any other province, says Statistics Canada.
The federal agency reported Friday that the Consumer Price Index in Alberta rose by three per cent, after a 2.6 per cent annual hike in September. Prices in the Calgary census metropolitan area were up by 3.3 per cent following a 3.2 per cent annual increase in September.
Todd Hirsch, chief economist with ATB Financial, said the year-over-year increase of consumer prices in Alberta hit one of its highest rates in more than four years.
“But the increase in prices was driven notably higher by one particular item in the basket of goods and services that can’t be purchased in the mall or grocery store. Household natural gas prices — which are notoriously volatile — shot up 30.7 per cent,” he said.
“Overall inflation was also lifted higher by prices for fresh fruits and vegetables, up 7.4 and six per cent respectively. These prices are victims of the much lower Canadian dollar, since almost all of our fresh produce is imported from the U.S. or priced in U.S. dollars.
“Helping to keep overall price increases manageable were lower prices for women’s clothing (2.5 per cent), footwear (1.6 per cent), and personal care items (1.1 per cent).”
Across Canada, prices rose by 2.4 per cent in October following a two per cent year-over-year hike in September. The federal agency said prices were up in all major components.
“Higher prices for shelter and food led the rise in CPI,” it said. “At the same time, larger year-over-year increases for transportation and for clothing and footwear contributed the most to the acceleration.”
Annual price increases were 2.8 per cent for shelter and for food, 1.1 per cent for transportation and 3.1 per cent for clothing and footwear.
The Bank of Canada’s core index rose by 2.3 per cent in October following a 2.1 per cent year-over-year increase in September.
Leslie Preston, economist with TD Economics, said both core and headline inflation have heated up dramatically over the course of 2014, calming the Bank of Canada’s fears about the very low inflation environment that persisted a year ago.
“The question for the Bank is will it last? In October, energy prices were up 4.2 per cent, mostly driven by last winter’s weather-related natural gas price spike. That will fall out of the year-on-year calculus in the months ahead, while at the same time gasoline prices, which remain up slightly on a year-on-year basis, are about to head lower. Energy inflation is set to ebb in the months ahead.”
Robert Kavcic, senior economist with BMO Capital Markets, said Canadian inflation crept higher again in October, and is now tracking ahead of the Bank of Canada’s forecast for all of the fourth quarter.
“While this probably won’t change their overall view that underlying price pressures are still muted, they might be watching a bit closer now,” he said.
Consumer prices in Alberta rise higher than Canada