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Canada’s inflation falls to lowest level since May: Statistics Canada

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Canada’s inflation falls to lowest level since May: Statistics Canada

Canada’s inflation rate fell to the lowest level since May, according to the federal statistics department. The Consumer Price Index, which measures monthly changes of a representative sample of goods and services, declined 0.2 percent in October. At an annualized rate, CPI advanced just 0.7 percent.

Energy prices fell 5.1 percent in October and at an annualized rate of 4.3 percent. Prices increased in five of the eight major components of the Consumer Price Index, with shelter costs rising 1.3 percent from year-ago levels. Food prices rose at an annualized rate of 0.9 percent after a 1.2 percent gain the previous month. Transportation costs decreased 0.1 percent in the 12 months to October.

Gasoline prices were the biggest factor behind the drop, Statistics Canada reported. Clothing and footwear, which declined 0.7 percent from year-ago levels, were also factors.

“Lower gasoline prices were a factor in all provinces in October, with Saskatchewan (-8.6 percent) recording the largest year-over-year decrease and Ontario (01.8 percent) posting the smallest,” according to the federal statistics department.

On a provincial level, Quebec posted the smallest year-over-year price increase. Consumer prices rose at an annualized rate of 0.8 percent in New Brunswick. Saskatchewan posted a 1.5 percent gain in consumer prices compared to year-ago levels, with a 4.9 percent gain in passenger vehicles over the same period.

Retail sales rose for the third consecutive month in September, with gains concentrated in six of the 11 retail subsectors. Retail sales advanced 1 percent to $40.7 billion. Growth was however entirely dependent on motor vehicles and parts dealers, which rose 4.1 percent. Retail sales excluding automobiles were flat in September.

“A very stretched consumer is somehow finding the room in a slowing job growth, rising rates, and weak credit growth environment to keep on spending at a decent clip,” said Derek Holt and Dov Zigler of Scotiabank.

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