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Consumer Price Index Edges Higher to Close out 2023

The Consumer Price Index (CPI) rose 3.4% on a year-over-year basis in December, following a 3.1% increase in November. While gasoline prices fell monthly for the fourth month in a row, the headline acceleration was largely the result of higher year-over-year prices for gasoline in December (+1.4%) compared with November (-7.7%). This was the result of a base-year effect where gasoline prices fell more monthly in December 2022 than they did in December 2023. Excluding gasoline, the headline CPI slowed year over year, from 3.6% in November to 3.5% in December.

Consumer Price Index Edges Higher to Close out 2023

Additional acceleration came from airfares, fuel oil, passenger vehicles and rent. Prices for food purchased from stores rose 4.7% year over year in December, matching the increase in November (+4.7%). Moderating the acceleration in the all-items CPI were lower prices for travel tours.

Every month, the CPI fell 0.3% in December, after a 0.1% gain in November. Lower month-over-month price movements for travel tours (-18.2%) and gasoline (-4.4%) contributed to the monthly decline. On a seasonally adjusted monthly basis, the CPI rose 0.3% in December.

Chart 1  Chart 1: 12-month change in the Consumer Price Index (CPI) and CPI excluding gasoline
12-month change in the Consumer Price Index (CPI) and CPI excluding gasoline

Chart 2  Chart 2: Headline acceleration led by the transportation component
Headline acceleration led by the transportation component

Gasoline prices increase on base-year effect

Year over year, gasoline prices rose 1.4% in December, following a 7.7% decline in November. The increase was the result of a base-year effect, as prices fell 13.1% month over month in December 2022, when prices for crude oil were lower amid concerns of a slowing global economy.

Monthly, gasoline prices (-4.4%) fell for the fourth consecutive month in December. Continued uncertainty about oil demand and high supply levels put downward pressure on prices.

Chart 3  Chart 3: Gasoline prices fall for the fourth consecutive month
Gasoline prices fall for the fourth consecutive month

Prices for air transportation rise month over month amid strong demand for air travel

Month over month, Canadians paid 31.1% more for air t