Canada Inflation Rate Slows to 10-Month Low

Consumer prices in Canada increased 1.1 percent year-on-year in August of 2016, down from 1.3 percent in July and missing market expectations of a 1.4 percent gain. It is the lowest inflation figure since October, due to a slowdown in cost of food, recreation, education and reading.
Statisics Canada | Joana Taborda | 9/23/2016 12:50:59 PM
Year-on-year, food prices were up 1.1 percent in August, after rising 1.6 percent in July. Prices for food purchased from stores recorded their smallest annual gain since June 2010, up 0.4 percent. The meat index decreased in August, after increasing in July, and the fresh fruit index posted its first decline since December 2013. Prices for food purchased from restaurants rose 2.5 percent, following a 2.7 percent gain in July.

The recreation, education and reading index was up 1.1 percent, after posting a 1.9 percent gain in July. This deceleration was partly attributable to the travel tours index, which declined 5.6 percent. The traveller accommodation index was unchanged.

The shelter index rose 1.7 percent, with the homeowners' replacement cost index (+4 percent) contributing the most to the gain. Electricity prices were up 5.6 percent while the natural gas index declined 9.9 percent.

The transportation index rose 0.3 percent, following a 0.2 percent decline in July. Gasoline prices posted a smaller decrease in August (-11.5 percent) than in July (-14.0 percent). The purchase of passenger vehicles index increased 5.2 percent after posting a 5.4 percent gain in July.

On a monthly basis, consumer prices declined 0.2 percent for the second month. Gasoline prices were down 0.9 percent. 

Excluding food and energy, consumer prices were unchanged. Year-on-year, prices rose 1.9 percent, down from 2.1 percent in July.

 Canada Inflation Rate Slows to 10-Month Low