Inflation cools to 1.6% in March in part due to cheaper clothes

Canada's cost of living increased by 1.6 per cent in the year ended in March, slightly lower than the rate in February, as the prices for food, clothing and shoes declined.

Statistics Canada reported Friday that stripping out food and energy prices, the inflation rate would have been 1.7 per cent. Economists had been expecting the rate to come it at around 1.8 per cent.

A big part of the decrease was food prices, which were down on a year-over-year basis for the sixth consecutive month, by 1.9 per cent in March. Compared to a year earlier, the cost of fresh fruit dropped 12.4 per cent while fresh vegetable prices fell 10.2 per cent.

Women's clothing also got cheaper, dropping by one per cent in March after decreasing by 3.5 per cent the month before. Children's clothing prices dropped by 4.4 per cent in the year ended in March.

Transportation-related costs continued to increase, led by a steady march higher for gasoline prices.

Gasoline prices were more than 15 per cent higher in March compared to the same month a year ago — down from a 23 per cent annual increase in February.