Canada September CPI - Softer core rates will comfort the BoC
September Canadian CPI edged up to 3.1% from 3.0% overall but this is softer than the 3.2% expected by the market. The Bank of Canada’s three core rates all moved lower. This suggests that despite concerns over oil, the BoC need feel no urgency to tighten at this month’s meeting.
CPI-Median fell to 1.9% from 2.0%, moving below target, while CPI-Trim moved further below target to 1.8% from 1.9%. The third core rate, CPI-Common, is less closely watched and remains above target, but slowed to 2.4% from 2.6%.
On the month CPI rose 0.1% overall but fell by 0.1% ex food and energy. Seasonally adjusted the overall rise was 0.4% but the ex food and energy rate rose by only 0.1%, slowing from four straight gains of 0.3% and that will ease any concerns at the BoC that energy strength night be feeding into underlying inflation. The yr/yr ex food and energy rate was unchanged at 2.1%. This is not one of the BoC’s core rates.
The seasonally adjusted detail shows mostly subdued outcomes outside a 1.2% rise in transport that was led by gasoline and a 0.3% increase in shelter. Unadjusted data shows the only significant positive outside energy was purchase of digital media. Air transport, traveler accommodation and travel tours all saw declines on the month, but these are in part seasonal.
