The country's main inflation gauge, the consumer price index, increased 6.9 per cent in September from a year earlier, compared with 7 per cent in the previous month. You need to know what to look for.
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The consumer price index has been increasing at a slower rate for the last three months.
Lower gasoline prices explain most of the decline, as they only rose from September to September, compared with an annual increase in August.
Higher prices for baked goods, fresh vegetables and meat led to the most significant increase in food costs in more than 30 years. The agency said the increase was due to poor weather, higher natural gas prices, andgeopolitical instability caused by Russia's invasion of Ukraine.
Excluding food and energy, inflation rose 5.4 per cent from a year earlier, compared with 5.3 per cent the previous month, suggesting the initial shock from surging commodity prices is rippling through the economy. The prices of passenger vehicles and furniture were more than in September of last year.
The Bank of Canada wants to keep year-over-year increases in the consumer price index within a range of one to three percent.
In April 2021, inflation broke out of the range and never looked back. In June, the annual increases peaked at 8.1 per cent, the biggest in four decades, as gasoline prices, diminished stores of staple food, global supply disruptions, overheated housing markets and a surge in demand after the Pandemic hit created a perfect storm of inflationary pressures.
In some places it is more common than in Canada. The UK's consumer price index increased in September from a year ago.
Positive evidence shows that inflationary pressures are decreasing. Households will feel squeezed because prices are rising faster than wages, and politicians will feel pressure to do something about it. The Bank of Canada isn't done raising interest rates. Their determination will be reinforced by the latest inflation reading.
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