Canada: Inflation ticks down in August
Consumer prices were flat on a seasonally-adjusted basis from a month earlier in August, following July’s 0.4% increase. According to Statistics Canada, higher food and shelter prices were offset by lower prices for alcoholic beverages, tobacco products and recreational cannabis.
Inflation inched down from July’s 2.0%, to 1.9% in August and missed analysts’ expectations of a 2.0% outturn. Consequently, inflation fell below the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation was stable at July’s 2.0% in August.
Going forward, inflation should remain relatively stable, supported by solid wage growth and the recently introduced carbon tax. That being said, developments in commodity prices remain a key risk to the inflation outlook.