Canada’s annual inflation rate cooled in October as energy prices weakened and clothing costs fell, taking inflation further from the Bank of Canada’s target, data from Statistics Canada showed on Friday.
The annual inflation rate decreased to 1.4 percent last month from 1.6 percent in September, in line with economists’ forecasts.
The central bank’s measures of core inflation were mixed. CPI common, which the central bank says is the best gauge of the economy’s underperformance, edged up to 1.6 percent, while CPI median, which shows the median inflation rate across CPI components, dipped to 1.7 percent.
The Bank of Canada targets inflation at 2 percent, the mid-point of a 1 to 3 percent range. A senior central bank official earlier this week cited soft inflation as one reason for caution after two interest rate hikes earlier this year.
The transportation component contributed the most to the inflation rate, rising 3 percent on an annual basis compared to September’s 3.8 percent.
Softer gasoline prices helped drive the deceleration. Gasoline costs were up 6.5 percent year-over-year, but that was significantly lower than September’s 14.1 percent jump in the wake of Hurricane Harvey.
Clothing prices declined 1.5 percent, driven by cheaper costs for women’s clothing. Overall, prices were up in seven of the eight major components of the consumer price index.