Canada: Inflation decelerates in August
September 23, 2016
In August, seasonally-adjusted consumer prices recorded a 0.1% decrease over the previous month, which was down from the flat figure recorded in July and marked the lowest reading in six months. According to Statistics Canada, lower prices for recreation, education and reading were the main drivers that contributed to this month’s decline. However, prices in five of the eight major components that compose the index increased over the previous month.
Inflation fell to 1.1% in August from 1.3% in July. August’s result was below market expectations of a 1.4% rise and remains within the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point. Annual average inflation in August matched July’s 1.4%—the highest reading since August 2015. Core inflation, which excludes volatile items such as gasoline and fresh food, decreased from 2.1% in July to 1.8% in August.
Author: Luis Lopez Vivas, Economist