Food Price Gains Slow as Overall Inflation Rate Eases in September

Gains in food prices continued to slow in September, helping to temper the overall national inflation rate. 

Released Tuesday, Statistics Canada’s Consumer Price Index showed prices for food purchased from grocery stories were up 5.8% year-over-year in September, down from a 6.9% gain in August. It is also well below the 11% advance posted in September last year, which marked the steepest rise in grocery prices in over 40 years. 

The easing in food price gains was largely attributed to slowing price growth in the meat, dairy products, and coffee and tea categories, which StatsCan said were mainly driven by base year effects. September 2023 has now fallen out of the 12-month movements, putting downward pressure on the indexes, the federal agency said. 

Canada's overall annual inflation rate for September stood at 3.8%, versus 4% in August. The deceleration was widespread, impacting key sectors, from food and clothing to health and recreation. The only notable exception was the jump in gasoline prices, which shot up by 7.5% in September from 0.8% in August. 

Going into the report, most analysts were expecting the inflation rate to generally hold steady in September at 4%. The slippage from August perhaps suggests the Bank of Canada will hold its key overnight lending rate steady at 5% when it makes its next rate announcement next week.