Canada Inflation Rate Steady at 5-Month Low of 1.9%

The annual inflation rate in Canada stood at 1.9 percent in September 2019, its lowest level since March, unchanged from August and below market expectations of 2.1 percent. Price growth was held back by a further decline in gasoline prices.

Year-on-year, inflation was steady for transportation (at 1.4 percent) and household operations, furnishings and equipment (0.5 percent). Meantime, cost slowed for shelter (2.3 percent vs 2.4 percent); recreation, education and reading (0.9 percent vs 2.0 percent) and alcoholic beverages, tobacco and recreational cannabis (0.7 percent vs 0.9 percent). On the other hand, prices advanced quicker for food (3.7 percent vs 3.6 percent), namely meat (5.5 percent vs 4.8 percent), as prices for fresh or frozen beef grew faster in September (4.7 percent vs 2.0 percent); clothing & footwear (2.6 percent vs 1.1 percent) and health & personal care (1.3 percent vs 0.9 percent).

Regarding special aggregates of the CPI, prices of services slowed (2.2 percent vs 2.6 percent) and those of energy continued to decline (-4.6 percent vs -4.7 percent), amid falling prices of gasoline (-10 percent vs -10.2 percent in August). The decrease in gas prices was partially attributable to continued low global demand for oil, as well as the switch by refineries from summer-blend gasoline to the less expensive winter blend. In contrast, cost of goods advanced faster (1.3 percent vs 0.9 percent), namely durable (1.9 percent vs 1.6 percent); semi-durable goods (2.0 percent vs 0.6 percent) and non-durable goods (0.9 percent vs 0.6 percent).

On a monthly basis, consumer prices decreased 0.4 percent, compared to a 0.1 percent drop in the previous month and market estimates of a 0.2 percent drop. Main downward pressure came from transportation (-2.1 percent) and recreation, education and reading (-1.5 percent), in particular tuition fees.

BoC's annual core inflation, which excludes volatile items, stood at 1.9 percent in September 2019, its lowest level since April, matching August's reading and in line with market expectations.

Canada Inflation Rate Steady at 5-Month Low of 1.9%

Statistics Canada | Luisa Carvalho |
10/16/2019 3:14:01 PM