Canada’s annual inflation accelerates more than forecast in September

Statistics Canada announced on Wednesday the country’s consumer price index (CPI) fell 0.1 percent m-o-m in September, the same pace as in the previous two months.

On the y-o-y basis, Canada’s inflation rate increased 0.5 percent last month, following a 0.1 percent advance in August.

Economists had predicted inflation would decrease 0.1 percent m-o-m but gain 0.4 percent y-o-y in September.

According to the report, price changes in transportation (+0.1 percent y-o-y compared to -1.3 percent y-o-y in August), recreation, education and reading (-1.2 percent y-o-y compared to -3.1 percent y-o-y), and shelter (+1.7 percent y-o-y compared to +1.5 percent y-o-y) components contributed the most to the September acceleration in the CPI. Meanwhile, the drop in gasoline prices (-10.7 percent y-o-y) in September was comparable to the August decrease (-11.1 percent y-o-y), while food price growth (+1.6 percent y-o-y) slowed slightly compared with last month (+1.8 percent y-o-y).

Overall, prices rose in six of the eight major components on a year-over-year basis in September.

The closely watched the Bank of Canada's core index rose 1.0 percent y-o-y in September after a 0.8 percent gain in August.