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Investing.com -- Canada’s annual inflation rate quickened in September, driven by a rebound in gasoline prices and a pickup in food and travel-related costs, adding complexity to the monetary policy outlook. According to data from Statistics Canada, the Consumer Price Index (CPI) rose 2.4% from a year earlier, up from 1.9% in August.
The pressure stemmed in large part from a narrower year-over-year decline in gasoline prices, which fell 4.1% in September versus a sharper 12.7% drop in the previous month. This shift was attributed to a base-year effect, with gasoline prices rising 1.9% on a monthly basis due to refinery disruptions in both Canada and the U.S.
Grocery inflation also gained momentum, with prices up 4.0% annually, compared to 3.5% in August. Notably, fresh vegetables swung from a 2.0% decline in August to a 1.9% increase in September, while sugar and confectionery prices surged 9.2%.
Rent continued to climb at the national level, rising 4.8% year-over-year in September. The increase was concentrated in Quebec, where rents rose 9.6%, particularly in Montréal, eclipsing more moderate trends in provinces like British Columbia.
Travel tour prices, which had slumped significantly in August, declined by just 1.3% in September. The moderated downturn came as travel tour costs rose 4.6% month-over-month, pushed upward by popular U.S. and European destinations hosting major events.
Excluding gasoline, the CPI rose 2.6% year-over-year in September, up from 2.4% in the previous month, suggesting underlying inflation pressures are broadening. The seasonally adjusted CPI climbed 0.4% on the month, indicating sustained short-term pricing momentum.
Clothing and footwear provided some relief, with the index rising just 0.8% on an annual basis, down from 1.7% in August. September marked the first month-over-month decline in clothing prices for that month since 1998, further softening consumer inflation in that category.
Education costs rose slightly, with tuition fees up 1.7% year-over-year, nearly in line with the 1.8% gain seen in 2024. However, the increases varied widely across provinces, with Prince Edward Island seeing the largest hike and Nova Scotia and Ontario experiencing the smallest due to tuition freezes.