Canada’s Inflation Rises to 2% in October

Inflation increased by 2.0% in October compared to the same month last year, up from a 1.6% rise in September, according to Statistics Canada’s monthly report of the Consumer Price Index.

Credit: Carlo Martin Alcordo/Flickr

Statistics Canada says the increase was driven primarily by slower declines in gasoline prices and steady increases in food and shelter costs. On a monthly basis, the CPI rose 0.4%, mirroring a decline of the same magnitude in September. Seasonally adjusted, the monthly increase stood at 0.3%.

Here are the highlights of the report:

Prices for goods saw a slight increase of 0.1% year-over-year in October, a rebound from a 1.0% drop in September.
Services prices increased by 3.6%, marking the smallest annual rise since January 2022. Over the last three years, services have increased by 14.2%, outpacing goods at 10.2%.
Gasoline prices fell by a smaller margin of 4.0% year-over-year in October, moderated by a month-over-month decrease of 6.4%. Despite the year-over-year drop, October saw a 0.7% increase in gasoline prices from the previous month.
Shelter prices rose by 4.8% in October year-over-year, a slight decrease from the 5.0% increase in September.
Notably, mortgage interest costs slowed to a 14.7% increase, contributing to the overall moderation in shelter price growth.

Table 18-10-0004-01/Credit: Statistics Canada

Prices rose faster in October compared with September in all provinces.

Food prices from stores climbed 2.7% in October year-over-year, an acceleration from 2.4% in September. Key drivers included a 7.3% increase in fresh vegetables and a 7.6% rise in preserved fruits, offset slightly by a slower increase in beef prices.

Property taxes surged by 6.0% year-over-year in October, the most significant rise since 1992, with Newfoundland and Labrador leading the increases at 9.7%.

Table 18-10-0004-01/Credit: Statistics Canada

The measures of core inflation, CPI-trim and CPI-median, which the Bank of Canada uses as one of the factors to determine the interest rate, are nudged higher and hover around 2.6% and 2.5%, respectively.

CPI-trim and CPI-median are core inflation measures that exclude extreme price changes. CPI-trim removes the outer 40%, while CPI-median focuses on the median price change.

The next scheduled date for announcing the overnight rate target is Wednesday, December 11, 2024.