Canada’s inflation rate declined to an annualized 3.8% in September from 4.0% in August, according to the latest reading of the Consumer Price Index (CPI).
Statistics Canada, which releases the CPI data, said that the deceleration in September was broad-based and included lower prices for travel, durable goods, and groceries.
However, higher gasoline prices, which rose 7.5% in September compared with a year ago, offset some of the drop in Canada’s overall inflation rate.
Excluding the impacts of higher gas prices, inflation in Canada fell to 3.7% in September from 4.1% in August.
On a monthly basis, inflation during September declined 0.1% after a 0.4% gain in August, said Statistics Canada.
While grocery prices cooled in September, they remained above headline inflation, rising 5.8% year-over-year in the month after gaining 6.9% in August.
Exerting downward pressure on inflation in September were air transportation costs, which fell 21% in the month as flights offered by airlines continues to increase.
Prices for durable goods also cooled off in September, with costs for new vehicles rising only 1.7% year-over-year after posting a 3.1% annual gain in August.
Furniture prices declined 4.6% and the cost of household appliances dropped 2.3% on a year-over-year basis in September.
Consumer prices increased in all Canadian provinces during September but rose at a slower pace compared with August in six provinces, said Statistics Canada.
The latest inflation data is likely to influence the Bank of Canada’s next decision on interest rates that is scheduled to take place on Oct. 25.
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