Inflation cooled to 3.8 per cent nationally last month, Statistics Canada said Tuesday, down from 4.0 per cent in August and snapping a streak of two consecutive monthly accelerations.
The annual rate of inflation saw a “broad-based” slowdown in September amid signs of continuing relief at the grocery store, the agency said.
StatCan said Canadians saw price at the grocery store rise 5.8 per cent in September, cooling from the 6.9 per cent increase in August.
Price growth for meat, dairy products, vegetables and coffee and tea all decelerated month-to-month, though edible fats and oils, bakery products, fish and fresh fruit saw costs rise quicker.
Higher costs for mortgages and rents were the main factors fuelling inflation in the month, StatCan said.
At the fuel pumps, gasoline prices rose 7.5 per cent year-over-year, but they declined slightly on a monthly basis, according to the agency.
Canadians also saw outright declines in the cost of airfare in the month, with prices down 21.1 per cent year-over-year. StatCan noted the price drop coincided with a gradual increase in flights on offer from airlines over the past year.
Canadians also saw prices drop annually on durable goods including furniture and appliances. New passenger vehicles saw prices grow at a slower rate in September, which StatCan attributed to better stock for new cars in the market.
The Bank of Canada’s closely watched metrics of core inflations also cooled slightly last month.
Tuesday’s inflation report comes ahead of the Bank of Canada’s next interest rate announcement slated for Oct. 25.
Inflation has proved stubborn in recent months, rising in July and August after hitting a low of 2.8 per cent in June.
CIBC senior economist Andrew Grantham said in a note on Tuesday after that while inflation is still holding above the Bank of Canada’s two per cent target, the easing in the September inflation print, combined with signs of cooling elsewhere in the economy, should be enough to keep the central bank from having to raise interest rates again.
Money markets trimmed bets for a rate hike next week after the data. They now see a 23 per cent chance for a rate increase next week, down from 43 per cent before the figures, according to Reuters.
More to come.
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