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Canada’s Inflation Rate Rose To 4% In August

Canada’s inflation rate rose to 4% in August from a year ago after expanding by 3.3% in July, according to Statistics Canada.

The August increase was mostly due to higher year-over-year prices for gasoline, said the federal agency.

Taking out gasoline, the Consumer Price Index rose 4.1% in August from a year earlier, matching the 4.1% increase seen in July of this year.

Canadians also paid more for rent and mortgage interest in August as rates in Canada remain elevated. However, prices declined in August for items such as travel and airfares.

On a monthly basis, inflation in Canada rose 0.4% in August, which was a slowdown from the monthly increase of 0.6% observed in July.

The monthly slowdown was mainly driven by travel tours (down 6.4%) and air transportation costs (down 6.9%) as prices fell from the peak summer travel season in July.

Gasoline prices rose 0.8% year-over-year in August, the first annual increase since January of this year. On a monthly basis, gasoline prices rose 4.6% from July.

At the same time, shelter prices increased 6% on a year-over-year basis in August, after rising 5.1% in July. Mortgage interest costs gained 30.9% in August on a monthly basis.

On a year-over-year basis, prices for food purchased from stores in Canada rose 6.9% in August. Beef (up 11.9%) and coffee and tea (up 9%) saw the biggest price hikes among food.

The August inflation data is in line with the forecasts of economists, many of whom expected an annualized increase of about 4% as gasoline prices rise across the country.

Brent crude oil, the international benchmark, is currently trading at $95 U.S. a barrel, its highest level in nearly a year and well above the $70 U.S. it was trading at in June of this year.