BREAKING NEWS ON INFLATION – CRUSHES ESTIMATES AND NOT IN A GOOD WAY

Canada’s rate of inflation re-accelerated by more than expected for the second straight month, due largely to:

– higher gasoline prices

– shelter prices up ( which includes mortgage interest costs)

– BUT price growth for groceries slowed.

-> Annual inflation: 4.0%, up from July’s 3.3% (consensus: 3.8%)

-> Monthly inflation: Up 0.4% (consensus: 0.2%)

-> Average core inflation (y/y): 4.0% vs. 3.75% in July

-> Average core inflation (3-month): 4.5% vs. 3.5% in July

Tuesday’s numbers highlight the challenge in the current phase of the inflation battle to get inflation down to 2%