Canada: Inflation stabilizes in August
September 19, 2014
In August, consumer prices rose a seasonally-adjusted 0.1% over the previous month, contrasting the 0.1% drop recorded in July. According to Statistics Canada, the overall price increase was driven mainly by an increase in prices of household operations, furnishings and equipment as well as a rise in prices for alcoholic beverages and tobacco products. Conversely, the index for clothing and footwear declined in August.
Annual headline inflation in August remained constant at July’s 2.1%, which was in line with market expectations. Inflation is still well anchored within the Central Bank’s tolerance margin of plus/minus 1.0 percentage points around its target of 2.0%. Annual average inflation continued on an upward trend and rose from July’s 1.5% to 1.6% in August, which represented a 21-month high. Core annual inflation, which excludes volatile items such as gasoline and fresh food, jumped up to 2.1% in August from July’s 1.7%, which was the largest increase since April 2012.