Canadian Consumer Price Index Increases 2.0% Year-Over-Year in August

On Tuesday, Statistics Canada (StatCan) reported that the Canadian Consumer Price Index (CPI) increased 2.0% year-over-year in August. This the slowest pace since February 2021 and down from a 2.5% increase in July.

The deceleration in headline inflation in August was due, in part, to lower prices for gasoline, due to a combination of lower prices and a base-year effect. Excluding gasoline, the CPI rose 2.2%, down from 2.5% in July.

StatCan points out that mortgage interest costs and rent remained the largest contributors to the CPI increase in August.

On a monthly basis, the CPI fell 0.2% in August, after a 0.4% increase in July. The monthly decline was led by lower prices for air transportation, gasoline, clothing and footwear, and travel tours. On a seasonally adjusted monthly basis, the CPI rose 0.1%.

Year-over-year, consumers paid 2.4% more for food purchased from stores in August, following a 2.1% increase in July. This was the result of a base-year effect, notably coming from prices for dairy products, up 3.3%, and fresh fruit, up 1.5%. Despite this, grocery prices decreased 0.2% month-over-month, largely due to a seasonally typical decline in prices for fresh vegetables, which declined 2.8%.