Key facts
- Canada's annual inflation rate was 3% in August, unchanged from July.
- Consumer prices fell 0.1% month-on-month in August.
- Annual gasoline price increases slowed to 22.8% in August from 25.7% in July.
- Food price inflation eased to 2.8% annually in August, below the 3% mark for the first time in 14 months.
- Core inflation measures CPI-median and CPI-trim remained around 2% and 1.9% respectively.
- Shelter costs rose to 1.5% in August.
Canada's annual inflation growth rate held steady at 3% in August, matching the previous month's pace, as firm crude prices continued to influence gasoline costs and food price increases moderated. Data from Statistics Canada showed that on a month-on-month basis, consumer prices decreased by 0.1%.
Gasoline prices saw a slight easing in August but still recorded an annual increase of 22.8%, a decrease from the 25.7% rise observed in July. Food prices, which had been accelerating faster than headline inflation, registered an annual growth rate of 2.8%. This marks the first time in 14 months that food price inflation has fallen below the 3% threshold. Dairy products, specifically cheese and yogurt, were key contributors to this slowdown.
Prices for tours and travel increased by 26.1% year-over-year, another significant factor contributing to inflation, partly due to a base year effect from a sharp decline in travel last year. Core inflation measures, CPI-median and CPI-trim, remained stable around 2% and 1.9% respectively, suggesting that rising crude prices have not broadly spilled over into other costs. Shelter costs, including rents and mortgage interest, saw a slight increase to 1.5% from 1.3% in July.
The Bank of Canada has previously stated its readiness to raise interest rates multiple times if inflation persists above its target range of 1% to 3%.