Canadian Consumer Price Index Up 7.0% Year-Over-Year in August—Smaller Than July’s Gain

Statistics Canada (StatsCan) reported today (9-20-22) that the Consumer Price Index (CPI) increased 7.0% on a year-over-year basis in August, down from July’s 7.6% gain. This was the second consecutive slowdown in the year-over-year price growth and was largely driven by lower gasoline prices in August.

Excluding gasoline, prices rose 6.3% year-over-year in August, following a 6.6% increase in July. August is the first month since June 2021 that the year-over-year CPI excluding gasoline has slowed.

On a monthly basis, the CPI declined 0.3%, the largest monthly decline since the early months of the pandemic. On a seasonally adjusted monthly basis, the CPI was up 0.1%, which is the smallest gain since December 2020.

StatsCan notes that prices for transportation, up 10.3%, and shelter, up 6.6%, helped drive the deceleration in consumer prices in August. Moderating the slowing in prices were sustained higher prices for groceries, as prices for food purchased from stores increased 10.8%—the fastest pace since August 1981 (11.9%).

In August, average hourly wages increased 5.4% on a year-over-year basis. This means that, on average, prices increased faster than wages. Although Canadians experienced a decline in purchasing power, the gap was smaller than in July.