Canada's core inflation cooled to 2.10%, a five-year low, even as the economy grew a stronger-than-expected 3.4% annualized in the second quarter and unemployment fell to a two-year low of 6.4%. In the United States, headline CPI held at 3.4% annually in July with core inflation at 2.5%, its slowest pace since March 2021, reducing the odds of a September Federal Reserve rate hike. The Bank of Canada has held its own rate at 2.25% for six straight meetings, with diverging inflation and growth trends complicating its September 17 decision.
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