Canada September Inflation Rate at 5-Month High

Canada's consumer price inflation increased to 1.6 percent year-on-year in September 2017 from 1.4 percent in the previous month, as expected. It was the highest inflation rate since April, mainly boosted by rising cost of transportation and shelter. Meanwhile, the BoC's annual core inflation, which excludes volatile items, fell to 0.8 percent, the lowest since December 1984.
Statistics Canada | Joana Ferreira | 10/20/2017 12:54:14 PM
Prices were up in six of the eight major CPI components in the 12 months to September, with the transportation and shelter indexes contributing the most to the year-over-year rise. The clothing and footwear index and the household operations, furnishings and equipment index both declined on a year-over-year basis.

Transportation costs rose 3.8 percent on a year-over-year basis, following a 2.8 percent increase in August. For a third consecutive month, gasoline prices were the largest contributor to the gain in transportation prices and also to their acceleration. The gasoline index rose 14.1 percent, largely due to supply disruptions caused by Hurricane Harvey. The purchase of passenger vehicles index accelerated 1 percent, up from a 0.7 percent increase in August.

The shelter index rose 1.4 percent after an increase of 1.3 percent in August.

Consumer prices for food were up 1.4 percent, after increasing 0.9 percent in August. Prices for food purchased from stores grew 0.9 percent year over year, largely due to the price declines reported in September 2016 not counting as part of the current 12-month movement. Prices for food purchased from restaurants rose 2.7 percent, up slightly from a 2.6 percent year-over-year gain in August.

Recreation, education and reading costs rose 2.1 percent, matching the increase in August. Tuition fees grew 3 percent in the 12-month period ending in September.

In September, the household operations, furnishings and equipment index (-0.4 percent) declined for the third consecutive month. The telephone services index contributed the most to this continued decline, down 3.1 percent. Consumers also paid 3.3 percent less for furniture.

The clothing and footwear index declined 2.3 percent. Prices for women's clothing contributed the most to the decrease in this major component, falling 4.6 percent, following a 1.9 percent decline in August. Men's clothing prices also posted a year-over-year decrease, falling 2.7 percent. In contrast, prices for clothing material and notions rose 3.5 percent.

Canada September Inflation Rate at 5-Month High