NEWS

Inflation inches higher to 2%

05/18/2012 10:13 EDT | Updated 07/18/2012 05:12 EDT

Consumer prices rose by two per cent in the year ended in April, slightly ahead of the annual pace seen the previous month.

Statistics Canada said increases in transportation costs were the major factor in the uptick. They were 3.2 per cent higher.

But energy prices increased 1.1 per cent in the 12 months up to April, well down from a 5.1 per cent annual pace in March.

It was the first time since October 2009 that energy prices increased at a slower pace than the overall inflation rate.

The agency noted that the rising prices at the pump have pushed the gasoline price index to its highest point since July 2008. But partly because of near-record high prices a year ago, the year-over-year increase in gasoline prices in April 2012 was the smallest since September 2010.

Overall, the so-called core rate, which strips out the impact of volatile food and energy prices, increased from a 1.9 per cent to a 2.1 per cent annual pace.

"Much of the pressure on core prices came from clothing, which was up 1.1 per cent in adjusted terms," BMO economist Doug Porter noted of the data.

Auto prices also showed strong gains, rising 3.3 per cent on an annualized basis — the fastest annual rise in auto prices since late 2010.

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