Canadian inflation came alive last month. Consumer prices were up 2.4% in October from a year earlier, Statistics Canada said Tuesday.
That marks the highest annual inflation rate since October 2008. It surpassed economists' expectations for 2.2% inflation, which followed September's price gains of 1.9%.
It was the first time since November 2008 that year-to-year price gains have met or exceeded the Bank of Canada's target rate of 2%.
Seasonally adjusted, month-to-month inflation of 0.7% in October was the most since January 2006, Statistics Canada said.
Even core inflation, which the central bank monitors for underlying trends, was well ahead of expectations last month. This annual rate, which strips out volatile items such as energy and certain foods, was 1.8%. Economists expected 1.5%, unchanged from September.
Energy costs were a major factor. Overall, consumers were paying 9.1% more for energy than a year earlier. Gasoline prices were 8.8% higher. Electricity costs were 8.1% more, and natural gas prices were ahead 10.6%.
On a month-to-month basis, gasoline prices surged 3.3%. Statistics Canada said the annual inflation rate in October would have been three-tenths of a percentage point lower with gasoline factored out.
Experts said the jump in inflation last month does not automatically mean the Bank of Canada will change course in keeping its key interest rate at a low 1%. They noted that newly implemented harmonized sales taxes in Ontario and British Columbia continue to boost the figures.
Seven of the eight major product categories had year-to-year price gains in October. Clothing and footwear was the one exception, where prices slipped 0.1%. Transportation was the category seeing the biggest price hike of 4.6%. Smaller price gains were seen in food, shelter, general household costs, health and personal care, recreation and education, and alcohol and tobacco.
Annual inflation rates in October by major product categories
Food 2.2%
Shelter 2.8%
Household operations, furnishings and equipment 1.3%
Clothing and footwear -0.1%
Transportation 4.6%
Health and personal care 2.7%
Recreation, education and reading 0.7%
Alcoholic beverages and tobacco products 2.4%
Annual inflation rates in October by province
Newfoundland and Labrador 3.0%
Prince Edward Island 2.3%
Nova Scotia 2.9%
New Brunswick 1.8%
Quebec 1.4%
Ontario 3.4%
Manitoba 1.2%
Saskatchewan 2.1%
Alberta 1.2%
British Columbia 2.4%
Overall 2.4%
