Pressure on Canadians' purchasing power eases somewhat

Pressure on Canadians' purchasing power eases somewhat

Pressure on Canadians

In its latest data release, Statistics Canada announced that Canadian inflation stood at 2.2% in September, noticeably dropping from August’s 2.8% and defying economists’ projections of 2.7%.

This should come as a measure of relief for Canadian households, who have been contending with steadily higher costs over the past few months, especially the 7-year peak inflation rate of 3% in July.

“Soft is the word of the day for Canadian economy watchers,” CIBC World Markets chief economist Avery Shenfeld wrote in a client note, as quoted by Bloomberg.

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“Not soft enough to forestall an October rate hike, but enough to lower expectations that had been building, erroneously in our view, for a follow up hike in December,” Shenfeld added.

Core measures of inflation also veered lower and averaged 2% in September, which is taken as a clear indicator that gas price and air transport increases, among others, are temporary.