Annual rate of inflationary Statistics Canada said Tuesday that it fell to 7.0% in August as prices continued to fall at petrol pump points.
While gas prices were 22% higher year-on-year in August, gasoline prices were down 9.6% month on month, according to the latest Consumer Price Index (CPI) release. This is the biggest monthly drop since April 2020.
Country’s annual inflation rate growth had previously slowed in July to 7.6%, largely due to falling gas prices.
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August’s figures, however, saw a slight decline that surpassed the pumps: annual inflation excluding gas prices was 6.3% for the month, down from 6.6% in July. . It was the first decrease in CPI excluding gas since June 2021.
Statistics Canada reported that shelter prices rose 6.6% in August, indicating a slowing rate of price growth.
Tuesday’s report isn’t all good news – grocery prices are up 10.8% from August 2021, the fastest pace on record since 1981. Last month saw an uptick. YoY price spikes for baked goods (up 15.4%), condiments, condiments and vinegars (up 17.2%), non-alcoholic beverages (up 14.1%) and fresh fruit (up 13.2%).
The agency said inclement weather, higher input costs, disrupted global supply chains and Russia’s war in Ukraine were factors contributing to higher food prices.
The so-called “core inflation” – a metric that economists use to track underlying price pressures that drive inflation – also took on a slight mode of decline in August.
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The average of the three metrics that Statistics Canada uses to track core inflation fell slightly to 5.2% last month after hitting an all-time high in July.
Economists who spoke to Global News on Monday said core inflation is one of the key measures the Bank of Canada will monitor to determine how high interest rates need to go.
However, CIBC senior economist Andrew Grantham said in a note Tuesday morning that a modest drop in inflation does not mean the central bank has run out of capacity.
“Even after decelerating today, the annual inflation rate is well above the Bank of Canada target and further rate hikes are still on the cards,” he wrote.
More will come.
– with files from the Canadian Press
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