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.
Read more: Interest rate could hit 6% by 2020
“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.