Inflation for September eases to 1.6%, below the Bank of Canada's target rate
Drivers pay lower prices for gasoline than they did last year
by Jordan Gowling · Financial PostCanada’s inflation rate fell to 1.6 per cent in September, below the Bank of Canada‘s two per cent target and marking the smallest yearly increase in prices since February of 2021.
The deceleration was driven by a drop in gasoline prices, which fell year over year by 10.7 per cent, Statistics Canada said on Tuesday. Fuel oil and other types of fuel fell by 22 per cent on a yearly basis. Prices for air transportation also fell by 4.4 per cent compared to September of last year. On a monthly basis, overall CPI declined by 0.4 per cent, after a 0.2 per cent decline the previous month.
Core inflation measures, which the Bank of Canada prefers to look at when making its monetary policy decisions, remained in the target range and largely unchanged on a yearly basis. CPI-median stayed at 2.3 per cent and CPI-trim came in at 2.4 per cent, the same as in August. CPI-common was up by 2.1 per cent, accelerating from a 1.9 per cent increase in August.
Rental prices continued to rise, with rent inflation increasing year over year by 8.2 per cent for the month of September, a deceleration from the 8.9 per cent recorded in August. Mortgage interest costs continued to be the top contributor to annual inflation, rising 16.7 per cent in September.
The prices of food purchased in stores continued to outpace overall inflation, increasing by 2.4 per cent in September, the same pace as in August. Food purchased in restaurants also increased by 3.5 per cent in September.
Statistics Canada noted that despite the deceleration in headline inflation, consumers continue to feel the impact of high prices for essential items. Food purchased in stores is up 20.7 per cent and rent is up 21 per cent, compared to three years ago.
• Email: jgowling@postmedia.com
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