Saturday, March 2, 2024
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How Did the Canadian Economy and the Consumer Price Index Correlate in 2023

The Consumer Price Index (CPI) rose 3.9% on an annual average basis in 2023, following a 40-year high increase of 6.8% in 2022 and a 3.4% increase in 2021. Aside from 2022, the annual average increase in 2023 is the largest since 1991. Excluding energy, the annual average CPI rose 4.5% in 2023 compared with 5.7% in 2022.

How Did the Canadian Economy and the Consumer Price Index Correlate in 2023

Chart 1  Chart 1: Annual average change in the Consumer Price Index (CPI) and the CPI excluding energy, 2009 to 2023
Annual average change in the Consumer Price Index (CPI) and the CPI excluding energy, 2009 to 2023

While prices rose in every major component on an annual average basis in 2023, price growth slowed in six of eight components compared with 2022. The transportation component (+0.9%) slowed the most as a result of lower gasoline prices, with notable decelerations also seen in the food (+7.5%) and shelter (+5.6%) components.

How Did the Canadian Economy and the Consumer Price Index Correlate in 2023

Chart 2  Chart 2: Prices rise at a slower pace in all but two major components
Prices rise at a slower pace in all but two major components

Price growth for goods eased to 3.2% in 2023, down from 8.7% in 2022, amid the continued easing of supply chain pressures. Prices for gasoline, natural gas and food contributed to a slowdown in non-durable goods (+4.0%). Prices for durable goods also increased at a slower pace in 2023 (+1.5%) compared with 2022 (+6.2%), led by passenger vehicles amid improved supply chains and inventories compared with 2022 as the supply of semiconductors continued to improve. Lower prices for furniture and household appliances also contributed to the deceleration.