Canada’s official inflation rate declined for the third month in a row in September, although many goods and services continued to become more expensive.
Statistics Canada reported Wednesday that the consumer price index fell to 6.9 percent in September, down from 7 percent in August.
The rate hit a 40-year high of 8.1% in June.
Economists had expected an even bigger drop, around 6.7 percent, but food prices pushed the headline numbers higher.
Food purchased in stores increased at a rate of 11.4%. This is the fastest rate of increase in grocery bills since August 1981.
Some of the price increases in the grocery aisle over the past year are surprising:
- Cereals have increased by 17.9%.
- Baked goods grew by 14.8%.
- Fresh fruit has increased by 12.9 percent.
- Fresh vegetables have increased by 11.8%.
- Dairy products have increased by 9.7%.
- Meat prices have increased by 7.6%.
The figure means that food inflation is almost double the overall inflation rate. Food inflation has now been higher than the general rate for 10 consecutive months.
Shopper John Romanelli says the cost of food is “atrocious” at the moment and lays the blame squarely at the feet of grocery chains.
“They’ve never made more money than today,” he told CBC News in an interview Tuesday. “We just got through two years of COVID and they’re making millions off us… All they’re doing is pocketing everyone’s hardships.”
John Romanelli says grocery prices are out of control right now. “I’ve never looked for those discount stickers in my life, but now I do because 50% off is still too expensive. It’s mind-blowing what goes on at these grocery chains.” (Martin Trainer/CBC)
Gasoline prices, which were a major contributor to inflation earlier this year, have now fallen for three consecutive months. They are still, on average, 13 percent more than a year ago, but during the month of September they fell by more than seven percent. The only exception to the pump price trend was BC, where unexpected oil refinery shutdowns sent gas prices up across the province. Pump prices rose 27 percent during the month.
Food and energy prices are always volatile, so the data agency crunches its numbers to calculate what’s known as the core rate, to get a better idea of the underlying price pressures in the global economy .
The key rate was unchanged at 5.3 per cent for the month, a worrisome sign that inflation is starting to take hold even as the Bank of Canada has raised rates aggressively to curb it.
“It’s great that headline inflation took a small step in the right direction in September, but inflationary pressures underlying core measures showed no signs of cooling,” TD Bank economist Leslie Preston said of the data.