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Canada's annual inflation rate unchanged in October – CTV News
OTTAWA –
Canada’s annual inflation rate held steady at 6.9 per cent last month.
After declining for several months, Statistics Canada said the rate of inflation was unchanged in October from September as gas prices went up.
In its latest consumer price index report released Wednesday, the federal agency said higher mortgage interest costs also put upward pressure on inflation.
However, offsetting higher gas prices and rising interest rates was a slowdown in price growth for groceries and natural gas.
Grocery prices have been rising at the fastest pace in decades in recent months. In October, grocery prices were 11 per cent higher than they were a year ago. That’s down from 11.4 per cent in September.
Despite the slowdown, grocery prices continued to rise at a faster year-over-year pace than overall inflation for an eleventh consecutive month.
On a monthly basis, the consumer price index was up 0.7 per cent.
The latest inflation numbers come after several months of declines in headline inflation. After reaching a peak of 8.1 per cent in June, inflation has slowed, largely due to tumbling gas prices.
However, gas prices went up in October for the first time since June, climbing 9.2 per cent from September to October.
The cost of living is a top concern in the Canadian economy as inflation erodes purchasing power and pushes the Bank of Canada to raise interest rates rapidly.
However, the gap between inflation and growth in wages is narrowing as inflation slows and wages continue to rise.
In October, wages were up 5.6 per cent compared with a year ago.
The Bank of Canada has raised interest rates six consecutive times since March to clamp down on high inflation. After slashing rates to near-zero during the pandemic, the central bank has moved quickly this year to raise the cost of borrowing for Canadians and businesses.
Higher interest rates are expected to bring about an economic slowdown that the central bank hopes will bring inflation down.
The Bank of Canada will be paying close attention to the latest consumer price index report as it prepares for its next interest rate decision slated in December.
The central bank will have an eye on its preferred core measures of inflation, which tend to be less volatile than the headline rate.
Here’s what happened in the provinces (previous month in brackets):
- Newfoundland and Labrador: 6.5 per cent (6.1)
- Prince Edward Island: 8.7 per cent (8.4)
- Nova Scotia: 7.7 per cent (7.3)
- New Brunswick: 6.9 per cent (6.8)
- Quebec: 6.4 per cent (6.5)
- Ontario: 6.5 per cent (6.7)
- Manitoba: 8.4 per cent (8.1)
- Saskatchewan: 8.0 per cent (7.1)
- Alberta: 6.8 per cent (6.2)
- British Columbia: 7.8 per cent (7.7)
The agency also released rates for major cities, but cautioned that figures may have fluctuated widely because they are based on small statistical samples (previous month in brackets):
- St. John’s, N.L.: 6.4 per cent (5.8)
- Charlottetown-Summerside: 9.4 per cent (9.0)
- Halifax: 7.7 per cent (7.3)
- Saint John, N.B.: 7.3 per cent (6.8)
- Quebec City: 6.7 per cent (6.7)
- Montreal: 6.7 per cent (6.8)
- Ottawa: 6.7 per cent (6.8)
- Toronto: 6.4 per cent (6.6)
- Thunder Bay, Ont.: 6.7 per cent (6.1)
- Winnipeg: 8.3 per cent (8.0)
- Regina: 7.8 per cent (7.0)
- Saskatoon: 8.0 per cent (6.8)
- Edmonton: 6.8 per cent (5.9)
- Calgary: 7.4 per cent (6.8)
- Vancouver: 7.3 per cent (7.7)
- Victoria: 7.9 per cent (8.0)
- Whitehorse: 7.6 per cent (7.5)
- Yellowknife: 7.1 per cent (7.7)
- Iqaluit: 4.3 per cent (5.0)
This report by The Canadian Press was first published Nov. 16, 2022
Tesla has promised to start selling cheaper models next year, days after a Reuters report revealed that the company had shelved its plans for an all-new Tesla that would cost only $25,000.
The news that Tesla was scrapping the Model 2 came amid a drop in sales and profits, and a decision to slash a tenth of the company’s global workforce. Reuters also noted increased competition from Chinese EV makers.
Tesla’s deliveries slumped in the first quarter for the first annual drop since the start of the pandemic in 2020, missing analyst forecasts by a mile in a sign that even price cuts haven’t been able to stave off an increasingly heated competition on the EV market.
Profits dropped by 50%, disappointing investors and leading to a slump in the company’s share prices, which made any good news urgently needed. Tesla delivered: it said it would bring forward the date for the release of new, lower-cost models. These would be produced on its existing platform and rolled out in the second half of 2025, per the BBC.
Reuters cited the company as warning that this change of plans could “result in achieving less cost reduction than previously expected,” however. This suggests the price tag of the new models is unlikely to be as small as the $25,000 promised for the Model 2.
The decision is based on a substantially reduced risk appetite in Tesla’s management, likely affected by the recent financial results and the intensifying competition with Chinese EV makers. Shelving the Model 2 and opting instead for cars to be produced on existing manufacturing lines is the safer move in these “uncertain times”, per the company.
Tesla is also cutting prices, as many other EV makers are doing amid a palpable decline in sales in key markets such as Europe, where the phaseout of subsidies has hit demand for EVs seriously. The cut is of about $2,000 on all models that Tesla currently sells.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
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Divisions within the Bank of Canada over the timing of a much-anticipated cut to its key overnight interest rate stem from concerns of some members of the central bank’s governing council that progress on taming inflation could stall in the face of stronger domestic demand — or even pick up again in the event of “new surprises.”
“Some members emphasized that, with the economy performing well, the risk had diminished that restrictive monetary policy would slow the economy more than necessary to return inflation to target,” according to a summary of deliberations for the April 10 rate decision that were published Wednesday. “They felt more reassurance was needed to reduce the risk that the downward progress on core inflation would stall, and to avoid jeopardizing the progress made thus far.”
Article content
Others argued that there were additional risks from keeping monetary policy too tight in light of progress already made to tame inflation, which had come down “significantly” across most goods and services.
Some pointed out that the distribution of inflation rates across components of the consumer price index had approached normal, despite outsized price increases and decreases in certain components.
“Coupled with indicators that the economy was in excess supply and with a base case projection showing the output gap starting to close only next year, they felt there was a risk of keeping monetary policy more restrictive than needed.”
In the end, though, the central bankers agreed to hold the rate at five per cent because inflation remained too high and there were still upside risks to the outlook, albeit “less acute” than in the past couple of years.
Despite the “diversity of views” about when conditions will warrant cutting the interest rate, central bank officials agreed that monetary policy easing would probably be gradual, given risks to the outlook and the slow path for returning inflation to target, according to the summary of deliberations.
Article content
They considered a number of potential risks to the outlook for economic growth and inflation, including housing and immigration, according to summary of deliberations.
The central bankers discussed the risk that housing market activity could accelerate and further boost shelter prices and acknowledged that easing monetary policy could increase the likelihood of this risk materializing. They concluded that their focus on measures such as CPI-trim, which strips out extreme movements in price changes, allowed them to effectively look through mortgage interest costs while capturing other shelter prices such as rent that are more reflective of supply and demand in housing.
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They also agreed to keep a close eye on immigration in the coming quarters due to uncertainty around recent announcements by the federal government.
“The projection incorporated continued strong population growth in the first half of 2024 followed by much softer growth, in line with the federal government’s target for reducing the share of non-permanent residents,” the summary said. “But details of how these plans will be implemented had not been announced. Governing council recognized that there was some uncertainty about future population growth and agreed it would be important to update the population forecast each quarter.”
• Email: bshecter@nationalpost.com
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Shares in US tech giant Meta have sunk in US after-hours trading despite better-than-expected earnings.
The Facebook and Instagram owner said expenses would be higher this year as it spends heavily on artificial intelligence (AI).
Its shares fell more than 15% after it said it expected to spend billions of dollars more than it had previously predicted in 2024.
Meta has been updating its ad-buying products with AI tools to boost earnings growth.
It has also been introducing more AI features on its social media platforms such as chat assistants.
The firm said it now expected to spend between $35bn and $40bn, (£28bn-32bn) in 2024, up from an earlier prediction of $30-$37bn.
Its shares fell despite it beating expectations on its earnings.
First quarter revenue rose 27% to $36.46bn, while analysts had expected earnings of $36.16bn.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said its spending plans were “aggressive”.
She said Meta’s “substantial investment” in AI has helped it get people to spend time on its platforms, so advertisers are willing to spend more money “in a time when digital advertising uncertainty remains rife”.
More than 50 countries are due to have elections this year, she said, “which hugely increases uncertainty” and can spook advertisers.
She added that Meta’s “fortunes are probably also being bolstered by TikTok’s uncertain future in the US”.
Meta’s rival has said it will fight an “unconstitutional” law that could result in TikTok being sold or banned in the US.
President Biden has signed into law a bill which gives the social media platform’s Chinese owner, ByteDance, nine months to sell off the app or it will be blocked in the US.
Ms Lund-Yates said that “looking further ahead, the biggest risk [for Meta] remains regulatory”.
Last year, Meta was fined €1.2bn (£1bn) by Ireland’s data authorities for mishandling people’s data when transferring it between Europe and the US.
And in February of this year, Meta chief executive Mark Zuckerberg faced blistering criticism from US lawmakers and was pushed to apologise to families of victims of child sexual exploitation.
Ms Lund-Yates added that the firm has “more than enough resources to throw at legal challenges, but that doesn’t rule out the risks of ups and downs in market sentiment”.
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