Canada: Inflation eases in October
November 22, 2013
In October, consumer prices decreased a seasonally-adjusted 0.1% over the previous month, which contrasted the 0.2% increase recorded in September. According to Statistics Canada, the decrease reflected lower prices for clothing and footwear, transportation and healthcare. Annual headline inflation eased from 1.1% in September to 0.7% in October, which was below market expectations of a deceleration to 0.8%. Consequently, inflation is now outside the Central Bank's tolerance margin of plus/minus 1.0 percentage points around its target of 2.0%. Meanwhile, annual average inflation was unchanged, holding at 0.9% for the second consecutive month. Core annual inflation, which excludes volatile items such as gasoline and fresh food, inched down from 1.3% to 1.2%. According to its October Monetary Policy Report, the Bank of Canada expects headline inflation to average 1.1% in 2013 and 1.8% in 2014. FocusEconomics Consensus Forecast panelists expect inflation to average 1.2% in 2013, which is down 0.1 percentage points from the previous month's forecast. The panel expects inflation to average 1.9% in 2014, which is unchanged from last month's estimate.
Author: Carl Kelly, Economist