Canada’s inflation rate continues to slow, thanks to lower prices on some travel-related services, durable goods, and grocery items, according to Statistics Canada.
The agency released its Consumer Price Index for September 2023, reporting that the inflation rate dipped to 3.8%, down from 4% in August, which it said was a “broad-based” deceleration.
According to the report, the price of groceries continues to slow, rising 5.7% year over year after a 6.9% increase in August. Statistics Canada says the year-over-year slowdowns in meat (+4.4%), dairy products (+4.0%), and coffee and tea (+2.7%) have resulted in the deceleration.
However, you may notice that shopping for fresh fruit (+3%), fish (+5.1%), bakery products (+8.0%), and edible fats and oils (+14.8%) have cost more, as these products increased at a faster rate on a year-over-year basis in September, compared to last month, noted Statistics Canada.
Canadians also paid less for transportation in September, coinciding with a gradual increase in airline flights in the past year.
Pain at the pump continued as gasoline prices rose 7.5% in September after a slight 0.8% increase in August. The increase was mainly due to a base-year effect, stated Statistics Canada. In September 2022, prices fell 7.4% month over month due to an increase in the global supply of crude oil.
In September 2023, prices at the pump increased year-over-year in Eastern Canada. In western provinces, gas prices saw less of an increase compared to August to September 2022. This is due to refinery shutdowns, which limited supply in September last year.
Excluding gasoline, the Consumer Price Index (CPI) rose by 3.7%, says StatsCan.
Despite a dip in Canada’s inflation rate, Canadians are still not feeling confident in the country’s economy or their own financial security.
According to Leger’s State of the Economy Report published today, 66% of Canadians say their confidence in the national economy is “poor” or “very poor.”
About one-quarter (24%) of Canadians say inflation remains the most important issue for them, followed by household affordability (17%).
Canadians are also showing growing concern about their current household financial situation, as 39% say their household finances are either “poor” or “very poor.” This is a four percentage point increase from January 2023.
The Bank of Canada is set to release its next interest rate announcement on October 25, which will provide more insight into just how much impact the country’s slowing inflation rate will have on Canadians’ pocketbooks. Last month, the BoC held its key interest rate at 5%.
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