Canada Inflation Rate Above Forecasts

Canada's annual inflation rose to 2.4 percent in October from 2.2 percent in the previous month and above market expectations of 2.2 percent. Prices of transportation and shelter led the increase. It was the ninth consecutive month that inflation has exceeded the Bank of Canada's 2 percent target.

Transportation prices rose 4.3 percent in October (vs 3.9 percent in September), driven by a 12 percent increase in gasoline prices, and shelter costs advanced 2.5 percent, the same pace as in September. Also, food inflation picked up to 2 percent in October from 1.8 percent in the previous month, and prices rose faster for household operations, furnishings and equipment (1.4 percent vs 1.3 percent), recreation, education and reading (1.8 percent vs 0.7 percent) and alcoholic beverages and tobacco products (4.5 percent vs 4.4 percent). On the other hand, inflation slowed for both clothing and footwear (1.3 percent vs 1.5 percent) and health and personal care (0.8 percent vs 1.3 percent).

Regarding special aggregates of the CPI, prices for durable goods increased 0.9 percent in October, compared to a 0.2 percent gain in September. With lower rebates and more new model-year vehicles available, the purchase of passenger vehicles index rose 1.7 percent, after increasing 0.6 percent in September. The price of services rose 2.7 percent in October (vs 2.5 percent in September), boosted by a rebound in prices of travel tours (3 percent vs -4.4 percent in September).

On a monthly basis, consumer prices rose 0.3 percent in October, reversing a 0.4 percent fall in September and beating market expectations of a 0.1 percent advance. Prices for airfares, passenger vehicles and travel tours accelerated the most.

Canada Inflation Rate Above Forecasts

Statistics Canada | Joana Ferreira |
11/23/2018 2:02:18 PM