Canadian inflation eases to 2.9 per cent in October

High fuel costs and rising food prices continue to be major contributors
||Last Updated: 11/18/2011

Consumer cost increases in Canada eased to 2.9 per cent in October, down from 3.2 per cent in September, according to Statistics Canada.

As has been the case in recent months, the major contributors to the country’s inflation rate were the higher cost of fuel and rising food prices.

Energy prices advanced 11.7 per cent, following a 12.5 per cent increase in September 2011. On a year-over-year basis, gasoline prices rose 18.2 per cent, after gaining 22.7 per cent last month. Prices for fuel oil increased 22.1 per cent in October, following a 27.4 per cent rise the month before.

Prices for food purchased from stores matched last month’s gain of 4.3 per cent in the 12 months to October.

If food and energy components are excluded from the equation, Statistics Canada says the average annual increase in consumer prices would be just 1.5 per cent.

On a year-over-year basis, prices increased in all eight major components in October. Transportation and food continued to post the largest gains.

The cost of transportation was up 6.7 per cent compared to 12 months before, following a 7.9 per cent gain in September. The increase was due to consumers paying more in passenger vehicle insurance premiums and for the purchase of passenger vehicles.

Food prices rose 4.3 per cent compared to the year before.

Every province experienced a slower year-over-year consumer prices increase, except for Alberta where prices advanced 3.4 per cent in the 12 months to October. The province saw a 2.8 per cent gain the month before.

In Ontario, consumer prices went up 2.7 per cent in the 12 months to October, after advancing 3.4 per cent the previous month. Prices in Quebec rose 3.3 per cent on a year-over-year basis in October, compared to the previous month’s increase of 3.4 per cent.

The smallest increase was experienced in British Columbia with prices averaging only 2.3 per cent higher than a year ago. Last month, the province saw a 2.4 per cent increase.

The Bank of Canada’s core index — or inflation minus the most volatile elements, including energy, some fruits and vegetables, mortgage interest, and tobacco — increased 2.1 per cent in the 12 months to October, following a 2.2 per cent gain in September.

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