Summary of Canadian Inflation Data - February 2026
Key Highlights
On February 17, 2026, it was reported that inflation in Canada for January was lower than expected. The Consumer Price Index (CPI) showed a month-over-month (MoM) change of 0.0%, which was below the anticipated 0.1% and a significant improvement from the previous month's decline of -0.2%. Year-over-year (YoY), the CPI was recorded at 2.3%, slightly below the expected 2.4% and matching the previous month's figure.
Core Inflation Metrics
The Core CPI, which excludes volatile items such as food and energy, showed a MoM increase of 0.2%, recovering from a previous decline of -0.4%. However, the YoY Core CPI decreased to 2.6%, down from 2.8% in the prior month.
Retail Sales and Economic Sentiment
Alongside the inflation data, retail sales figures were also released, indicating a contraction. This suggests a noticeable deceleration in consumer sentiment, which is likely contributing to the downward pressure on prices.
Market Reaction
In response to the inflation data, the US Dollar experienced a slight appreciation against the Canadian Dollar, with the USD/CAD trading at 1.3655, reflecting a 0.15% increase.
Conclusion
The lower-than-expected inflation figures in Canada, combined with the contraction in retail sales, indicate a potential slowdown in economic activity. This could have implications for monetary policy and market sentiment moving forward.