Inflation rate eases to 2.6 per cent as gasoline prices recede

OTTAWA — Sharply falling energy prices took the steam out of inflation last month, cutting the overall rise in Canadians’ cost of living to 2.6 per cent, down from 3.4 per cent in September.
On a month-to-month basis, consumer prices fell one per cent in October from September, the largest drop since June 1959.

Statistics Canada said Friday that gasoline was the key reason for the sharp drop, as pump prices fell 13.4 per cent in October from September.
The agency noted that fuel prices still hadn’t come down to year-ago levels, indicating the headline inflation rate still has room to fall. Gasoline prices were still 13.3 per cent higher than last October.
Lower energy costs were felt in other items as well. Transportation costs were only 1.6 per cent higher than a year ago, as opposed to 4.7 per cent higher in September.
While energy costs continued easing, the cost of food rose for the eight consecutive month.
Overall, food prices were 6.1 per cent higher in October than last year, Statistics Canada said. Food purchased in grocery stores was 7.3 per cent higher, and baked goods were up 14.2 per cent. Staples such as bread rose 17.7 per cent and pasta was up 37.1 per cent year-over-year.
Canadians also paid more for housing in October, as mortgage interest costs rose 7.2 per cent, shelter expenses were up 3.8 per cent and property taxes rose 3.2 per cent.
But many items were less expensive in October than last year.
The cost of buying or leasing a vehicle fell nine per cent, computer equipment and supplies dropped 12 per cent and clothing and footwear slipped 2.8 per cent.
Regionally, the annual inflation rate fell in eight of the 10 provinces, with only Saskatchewan and Manitoba bucking the trend.