Canada’s annual inflation rate climbs 1 per cent in October

New inflation numbers out this morning show lower energy prices are keeping the cost of living in check.

The all-items consumer-price index advanced 1% in October from a year earlier, Statistics Canada said Friday, matching September’s gain.

The annual core inflation rate, watched by the Bank of Canada, was 2.1 percent, the same as the previous month.

“Prices were up in seven of the eight major components on a year-over-year basis in October, with the rise in the CPI led by higher prices for food”. Economists had expected an increase of 2.0 per cent. The consensus among traders was for a 1% increase in October, according to economists at Royal Bank of Canada. Transportation was the only component to fall, driven by the drop in gasoline prices and making for its twelfth consecutive year-over-year decline.

The federal agency said food prices rose by 4.1 per cent from a year ago.

Sales were off in six of the country’s 10 provinces, including oil-sensitive Alberta, which saw a drop of 1.1 percent with decreases across most store types. Motor vehicle and parts sales fell for the first time in eight months, by 0.5 percent to C$11 billion, and clothing and accessories sales fell 1.2 percent to C$2.5 billion. That so-called volume measure of sales is a better indication of retail’s contribution to economic growth.