'Mission accomplished': Inflation rate hits Bank of Canada's two per cent target

The inflation rate hit the Bank of Canada’s two per cent target in August, down 2.5 percent from the previous month and marking the lowest level since February 2021.

"Mission accomplished. So we’re back to the target here that the Bank of Canada was looking for," says David MacDonald, a senior economist with the Canadian Centre for Policy Alternatives.

Lower gas prices, cheaper clothing, and a decrease in the price of footwear are all leading the charge.

"The relationship is pretty significant. Probably about 20 to 30 per cent of the basket of goods that we look at when it comes to inflation, when it comes to price it’s affected very much by the price of gas and diesel," says petroleum analyst Dan McTeague.

That's because it makes these items cheaper to produce and ship.

"It affects the cost of goods to the production, whether it’s mining, whether it’s farming, whether it’s the building of certain products, whether it be automotive or manufacturing," says McTeague.

Inflation peaked at 8 per cent two years ago. However, some consumers say the new numbers have yet to result in significantly lower prices at the cash register.

"Inflation might be decreasing, but it increased since COVID so much that that’s what you’re feeling. So it might be going back down, but the prices are already up," says consumer John McPartland.

He isn't optimistic he'll see a significant price drop, especially on high priced items.

"I’m not hopeful, not really. I mean now that the prices are where they are you would need a whole lot more competition of people under bidding to bring the prices down," says McPartland.

McTeague expects lower pump prices are here until at least November.