February inflation rate slows to 2.8% as price growth unexpectedly eases

Canada's annual inflation rate unexpectedly fell to 2.8 per cent last month, amid sharp declines in cellular and internet services as well as slower grocery price growth.

Canada's annual inflation rate unexpectedly fell to 2.8 per cent last month, amid sharp declines in cellular and internet services as well as slower grocery price growth.

Statistics Canada released its February consumer price index report Tuesday, which shows price growth softened for a second consecutive month.

Economists were widely expecting Canada's inflation rate to have risen above January's 2.9 per cent, in part due to higher gasoline prices.

CIBC economist Katherine Judge called the report "unambiguously good news" in a client note.

The federal agency says prices for wireless services were down 26.5 per cent and internet prices fell 13.2 per cent from a year ago.

Prices for food purchased at stores in February were up 2.4 per cent from a year ago, marking the first time prices grocery prices rose more slowly than overall inflation since October 2021.

However, that's little relief to Canadians who continue to pay significantly higher prices for food than they did a few years ago. The federal agency says grocery prices increased 21.6 per cent between February 2021 and February 2024.