Canada's inflation cools more than expected, easing pressure on the Bank of Canada
Canadian consumers got something of a reprieve in September, with inflation moderating to a 3.8 per cent annualized pace, down from four per cent a month before.
That 3.8 per cent figure was also below the estimates of economists, whose consensus view was that price pressures would hold steady at four per cent for the month. So-called trim and median inflation — the Bank of Canada’s preferred measures, as they strip out some of the most volatile items of the inflation basket — also decelerated in the month, to 3.7 and 3.8 per cent, respectively. That brought the three-month average of median inflation to 3.5 per cent — down from 4.4 per cent — a welcome trend for the central bank.
The deceleration was broad-based, with prices easing for certain travel-related services, durable goods and groceries, the latter of which has proven to be a flashpoint with Canadian consumers.
That slowdown breaks a two-month string of accelerating price pressures, giving further evidence the Bank of Canada’s most aggressive interest rate-hiking cycle in recent memory is having the desired effect of taking some of the heat out of the domestic economy. On Oct. 16, the central bank noted in its Business Outlook Survey and Survey of Consumer Expectations that firms and consumers remain wary of higher costs as inflation remains at elevated levels.
On the durable goods front — items that are intended to last for more than three years — prices notched declines on a number of fronts, with furniture prices falling 4.6 per cent year over year and appliance prices down 2.3 per cent.
On the flip side, Canadians continue to pay more at the gas pump, with prices rising at a 7.5 per cent pace in September, up from just 0.8 per cent in August. The
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