Canadian Inflation Rate Eases to 2.2% in October

The Canadian inflation rate edged lower in October, driven by declining gasoline prices and a further cooling in grocery costs, according to new data from Statistics Canada. 

The Consumer Price Index (CPI) rose 2.2% year-over-year last month, down from 2.4% increase in September and closer to the Bank of Canada’s 2% target. Gasoline and food were two of the largest contributors to the slowdown. 

Analysts surveyed by Reuters had anticipated an annual inflation rate of 2.1%, only slightly lower than the actual reading.  

The most significant movement came at the pumps. Prices at the pump fell at a faster pace year over year in October (-9.4%) compared with September (-4.1%), resulting from a 4.8% month-over-month decline in October. The monthly decline was largely due to a switch to cheaper winter blends, as well as lower crude oil prices amid continued concerns of oversupply, StatsCan said. 

Food inflation also eased, providing additional relief to households. Grocery prices rose 3.4% year over year in October, down from 4% in September but still the ninth consecutive month in which food inflation outpaced the headline inflation rate.  

Prices for other food preparations rose 3.2%, while fresh vegetable prices fell 1.4%. Offsetting some of the relief was a sharp increase in fresh or frozen chicken, which jumped 6.2% after a modest 1.5% rise in September.