The headline inflation rate in Canada moderated for the eighth time in nine months in March after hitting a multi-decade high last June.

The Consumer Price Index rose 4.3% year-over-year in March compared to a reading of 5.2% in February.

While the national inflation rate has not been this low since August 2021, prices remain elevated.

The slowdown in March was widely expected due to the observed drop in gasoline prices.

Food price inflation remained high at 8.9% but this was at least down from the 9.7% pace set in February.

Core inflation (excluding food and energy) remains somewhat sticky at 4.5% with the cost of services rising by 5.1%.

At 3.3%, Alberta had the lowest rate of consumer inflation among the provinces in March while Manitoba had the highest at 5.2%. 

The main reason for Alberta’s lower reading was energy prices, which dropped 16% in Alberta compared to 7% nationally. 

Within the energy component, the year-over-year drop in gasoline prices was larger in Alberta (-19.7%) than in the country as a whole (-13.8%), reflecting in part the removal of the provincial gasoline tax in Alberta.

At the same time, natural gas prices fell by 20.6% in Alberta compared to an increase of 13.4% nationally.

While the continued pullback in the national inflation rate is reassuring, the Bank of Canada is unlikely to change its stance based on one month of data. The core inflation reading remains elevated, with more sticky service price inflation (+5.1% in March). In its Monetary Policy Report released last week, the Bank indicated that the trek back to the 2% inflation target is not expected to take place until late next year. 

The next interest rate decision by the Bank of Canada is set for June 7.

Answer to the previous trivia question: The latest regulations being proposed by the Biden administration would require about 67% of new vehicles sold in the United States to be electric by 2032.

Today’s trivia question: The California Gold Rush of 1849 caused inflation to spike. Approximately how much were miners paying for a dozen eggs today’s dollars?