Canada: Annual inflation in August drops to 2.2% vs 2.7% expected

"The Consumer Price Index (CPI) rose 2.2% on a year-over-year basis in September, following a 2.8% increase in August," Statistics Canada reported on Friday. This reading fell short of the analysts' expectation of 2.7%. Furthermore, the Bank of Canada's core CPI, which excludes food and energy prices, declined 0.1% on a monthly basis in September to drag the annual rate to 1.5% compared to the market expectation of 1.8%.

Key quotes

• Month over month, the CPI decreased 0.4% as transitory pressures from the gasoline, air transportation and travel tours indexes, which boosted the all-items CPI in July and August, eased.
• Prices for durable goods rose 0.2% year over year, after increasing 1.1% in August. 
• On a seasonally adjusted monthly basis, the CPI declined 0.1% in September, following a 0.1% increase in August.