Fri. Dec 13th, 2024

Consumer Price Index Surges in October

Canada’s Consumer Price Index (CPI) recorded a year-over-year increase of 2.0% in October, up from 1.6% in September, according to the latest data from Statistics Canada. The rise was propelled by a smaller decline in gasoline prices, which eased by 4.0% compared to a 10.7% drop in the previous month. Excluding gasoline, the all-items CPI remained steady with a 2.2% increase for the third consecutive month.

Prices for goods saw a marginal increase of 0.1% year-over-year in October, marking a rebound from a 1.0% decline in September. Conversely, service prices rose 3.6%, the slowest annual growth since January 2022, as inflationary pressures in this sector appeared to ease. Over the last three years, goods and services have increased by 10.2% and 14.2%, respectively.

On a monthly basis, the CPI grew by 0.4% in October, reversing a similar decline in September. Adjusted for seasonality, the monthly increase stood at 0.3%.

Gasoline prices played a pivotal role in shaping October’s inflation landscape. Although still lower than a year ago, the 4.0% annual decline was a significant moderation compared to September’s double-digit drop. Monthly prices ticked up by 0.7%, reversing September’s 7.1% decline.

Shelter costs rose 4.8% year-over-year in October, compared to a 5.0% increase in September, as growth in mortgage interest costs slowed. The mortgage interest cost index increased by 14.7%, down from 16.7% in the previous month, continuing a trend of deceleration since peaking at 30.9% in August 2023. Rent prices also rose at a slower pace, climbing 7.3% year-over-year after an 8.2% increase in September, with notable decelerations in provinces like Nova Scotia (+5.2%) and Manitoba (+6.5%).

Despite these trends, rent costs remain significantly elevated, with a 21.6% rise compared to October 2021.

Food prices at stores outpaced overall inflation, rising 2.7% year-over-year in October, up from 2.4% in September. The increase was driven by sharp gains in the cost of fresh vegetables (+7.3%) and preserved fruits (+7.6%). However, the rate of growth in fresh or frozen beef prices slowed, contributing to a partial offset.

Inflation accelerated across all provinces in October, underscoring the broad impact of rising prices. Property taxes and other special charges, measured annually, increased 6.0% year-over-year, the highest jump since 1992. Newfoundland and Labrador saw the steepest rise (+9.7%), followed by British Columbia (+8.0%).

With a 2.0% annual rise in October, the inflation rate remains within the Bank of Canada’s target range of 1% to 3%, though continued volatility in energy prices and housing costs could shape future trends.

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