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Canada's Consumer Prices Decline for 4th Month; Leaving BOC on Hold
Posted: 16-10-2009 , 15:44 GMT


Canada’s Consumer Price Index declined 0.9% in September from a year earlier, after falling 0.8% the month prior, and was in line with economic expectations. In detail, the report illustrated the largest monthly gain in household operations, gaining 0.5%, while food and shelter slipped 0.2%. At the same time, gasoline, car and clothing prices fell 23%, 5.9% and 1.2% respectfully. On the positive side, with the recent gains of 30,600 jobs, the economy is growing at a steady rate and the fall in consumer prices will continue to attract domestic demand of goods. Going forward, the central bank is likely keep interest rates 0.25% at their up-incoming meeting October 20th as the data does not present any inflationary risks. However, the rise in core prices present concerns for the BOC and may shorten the time frame of mid 2010 for keeping interest rates at its current record low.

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