Canadian Inflation Pressures Ease

Canadian inflationary pressures declined in September, according to the Canadian Future Inflation Gauge (CFIG) published by Economic Cycle Research Institute (ECRI). The value of ECRI's CFIG lies in its ability to measure underlying inflationary pressures and thereby predict turning points in Canadian inflation rate.

The CFIG fell to 105.1 (1992=100) in September from 105.6 in August, as did its smoothed annualized growth rate to 1.2% from 2.5%, mainly due to a disinflationary move in a measure of commodity prices, mostly offset by inflationary moves in measures of money supply and employment. The ECRI press release states:

As anticipated by the earlier upturn in the CFIG, Canadian inflation has been in a cyclical upswing, recently reaching a five-year high. However, with the CFIG falling further from the 19-year high seen in May, Canadian inflation is set to ebb in the coming months.

 

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