Inflation cools to 2.2% in October as gas, grocery prices fall

Cheaper prices at the gas pumps and grocery store helped bring down inflation in October, Statistics Canada said Monday.

The annual rate of inflation cooled to 2.2% in October—a tick higher than economists’ expectations but down from 2.4% in September.

Gas prices fell 4.8% on a monthly basis in October as retailers switched to cheaper winter blends of fuel and global crude oil prices dropped on concerns of oversupply.

Prices at the grocery store also fell 0.6% in October, the largest month-to-month decline since September 2020.

Prices for food purchased from the grocery store rose 3.4% on an annual basis, cooling from 4% in September.

StatCan said that deceleration was driven by cooling costs for some food preparations—mostly processed foods—and fresh vegetables, but bigger price hikes on fresh and frozen chicken moderated the decline.

Keeping the overall inflation rate sticky in October was a rare increase in cellular service costs. StatCan said this segment saw prices rise 7.7% annually, the first yearly increase since April 2023.

Consumers were also paying more for home, mortgage and car insurance in October, particularly in Alberta, the agency said. Over the past five years, the cost of home and mortgage insurance has risen 38.9% nationally, while vehicle insurance premiums are up 18.9%.

The October inflation report marks the Bank of Canada’s last look at price data before its final interest rate decision of the year on Dec. 10.

The central bank’s benchmark interest rate stands at 2.25% following cuts at back-to-back meetings in September and October.

Bank of Canada officials signaled last month they may be done with rate cuts in the near term unless economic data surprises them.

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