Canada’s inflation rate was 6.9 percent in October, the same as the previous month’s pace.
Economists had expected the rate to rise due to rising gas prices last month, but instead data released by Statistics Canada showed the cost of living rose at the same annual rate in October than the previous month.
After easing in September, gasoline prices rose again in October, increasing their annual change to 17.8% over the past 12 months. That’s up from an annual pace of 13.2% previously.
The price of filling up continues to add fuel to Canada’s inflationary fire, but another major source of consumer consternation, the cost of food, is showing signs it may finally be heading in the opposite direction.
Food prices rose 10.1% in the year to October. This is still ahead of the overall rate, which has been the case for 11 consecutive months, but is a slight decrease from the 10.3% pace seen in September. This is an encouraging sign that Canadians may soon see some relief on their grocery bills.
So with one major source of inflation worsening, but another showing hopeful signs of improvement, the net result was an overall inflation rate that was lower than economists had expected.
“Any CPI [Consumer Price Index] that’s no worse than expected, should be seen as a big win these days, and it was notably lower than we had anticipated,” noted Bank of Montreal economist Doug Porter.
He went on to say that at 6.9 percent, Canada’s inflation rate is now the second lowest in the G7, “above only Japan, while no fewer than three members now post double-digit figures ( Italy, Great Britain and Germany).”