Canadian consumer prices picked up their pace last month as the annual inflation rate moved up from very low levels and closer to the Bank of Canada’s ideal target of two per cent, Statistics Canada said Friday.
Higher gasoline prices helped push the annual inflation rate in September to 1.6 per cent, up from 1.4 per cent a month earlier and away from its two-year low of just one per cent in June, the agency said.
The gasoline index jumped 14.1 per cent in the 12 months leading to September, mostly due to disruptions caused by Hurricane Harvey, Statistics Canada said.
Excluding gas prices, inflation was 1.1 per cent.
The inflation-targeting central bank scrutinizes inflation ahead of its rate decisions. Its next benchmark rate announcement is scheduled for next Wednesday. However, only one of the bank’s three preferred measures of core inflation, which seek to look through the noise of more-volatile items, increased last month while the others stayed put.
Statistics Canada also released numbers Friday that showed retail sales contracted 0.3 per cent in August, after increasing 0.4 per cent in July. Retail sales volumes in August recoiled 0.7 per cent.
Excluding sales at gas stations and auto dealers, the report said retail trade was down 1.3 per cent in August. Sales were also down 2.5 per cent at food and beverage stores and 2.4 per cent at furniture and home furnishings stores.
The retail sales data suggests the economy is starting to show signs of slowing down, as widely expected, following its red-hot performance in the first half of the year.
On inflation, the report highlighted gasoline, travel tours and air transportation as the biggest upward contributors to consumer prices. The downward pressure was led by cheaper electricity, women’s clothing, and furniture. The report also found that consumer prices rose in seven of the 10 provinces in September.
– With a file from Erica Alini