Canada’s inflation rate is coming down — but grocery bills keep getting more expensive | CBC News

Canada’s official inflation rate declined for the third month in a row in September, even as many goods and services continued to get more expensive.

Statistics Canada reported Wednesday that the consumer price index declined to 6.9 per cent in September, down from 7 per cent in August. 

The rate peaked at a 40-year high of 8.1 per cent in June.

Economists had been expecting an ever bigger drop off to about 6.7 per cent, but food prices pulled the headline number up.

Food purchased at stores increased at a pace of 11.4 per cent. That’s the fastest pace of increase in grocery bills since August 1981.

The number means food inflation is almost twice as much as the overall inflation rate. Food inflation has now been higher than the overall rate for 10 months in a row.

Gasoline prices, which were a major contributor to inflation earlier in the year, have now fallen for three months in a row. They’re still on average 13 per cent higher than they were a year ago, but they fell by more than seven per cent during the month of September. The lone exception to the pump price trend was B.C., where unexpected oil refinery shutdowns led to the price of gasoline spiking all over the province. Pump prices were up by 27 per cent during the month.

Food and energy prices are always volatile, which is why the data agency strips those out of its numbers to calculate what’s known as the core rate, to get a better sense of the underlying price pressures in the overall economy.

The core rate was unchanged at 5.3 per cent during the month, a disturbing sign that inflation is starting to become entrenched even as the Bank of Canada has been hiking rates aggressively to rein it in.

“It is great that headline inflation took a small step in the right direction in September, but underlying inflation pressures in core measures showed no signs of cooling down,” TD Bank economist Leslie Preston said of the data.