Inflation in Canada Fell Below Expectations: 2.2%

Inflation Data Released in Canada

Canada's inflation rate fell to 2.2% in October. This decline is considered a notable development following the consecutive interest rate cuts by the Bank of Canada.

Decline Below Expectations

According to the data released by Statistics Canada, the headline inflation was expected to be 2.1% in October, driven by a yearly decline of 2.2% in gasoline costs. Inflation in September was at 2.4%.

Monthly Consumer Price Index

The Consumer Price Index (CPI) showed a monthly increase of 0.2%. Excluding food and energy, the CPI recorded an annual increase of 2.7%.

Conflicting Signals in Core Inflation

The report presented conflicting results regarding core inflation. The adjusted and median indicators preferred by the Bank of Canada decreased from the previous 3.1% level to 2.95%. The three-month moving average fell to 2.6%.

Price Pressures and Housing Costs

34% of the items in the Consumer Price Index showed an annual increase of over 38%, while prices excluding food and energy rose by 2.7% compared to the previous year. Housing prices, on the other hand, experienced a monthly increase of 0.6% and an annual increase of 2.5%.

Desjardins Economist Observations

Desjardins Chief Economist Jimmy Jean stated in an interview with BNN Bloomberg, 'Overall, inflation dynamics are still weakening. We have a weak economy, and this situation allows the Bank of Canada to feel comfortable regarding monetary policy.'