Canadian Inflation Eases In September

With inflation figures on top of traders’ minds, Canada reported a print that was less than expected, raising hopes about policy direction at the country’s central bank meeting next week. The country’s annual inflation rate slowed to 3.8 percent in September amid a decrease in underlying core measures. While gasoline prices were higher year over year, lower prices from durable goods, groceries and travel services drove prices down. 

Additionally, helping drive the annual print lower was a combination of a slowing in September of 2023  as well as the removal of the large monthly gains from September 2022, when grocery prices increased at the fastest pace in 41 years. 

In September, the consumer price index dropped 0.1 percent, driven lower as price growth for groceries continued to slow for the third straight month — the slowest pace since December 2021. All goods components of the index declined during the month, while costs for services were flat. Gasoline prices fell by 1.3 percent during the month, but are still up by 7.5 percent over the annual period, making it one of the biggest factors. Excluding gasoline, the CPI was 3.7 percent.  

Year over year, prices increased in all provinces in September but rose at a slower pace compared with August in six provinces. The softening prompted hopes that the Bank of Canada would not raise rates at its policy meeting next week. 

 

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