Canada August CPI Rises To 1.4% Y/Y From 1.2% in June>

--Seasonally Adjusted August CPI M/M +0.2%, Matching June

By Courtney Tower 

     OTTAWA (MNI) - Canadian annual inflation rose again in August, by 

two percentage points, as it had done in July, to 1.4% year-over-year 

from 1.2%, while two of the three Bank of Canada measures of core 

inflation also ticked up, Statistics Canada reported Friday. 

     The  rise to 1.4% in annual CPI inflation was just slightly below 

the 1.5% expected by analysts surveyed by MNI. 

     The Bank of Canada now sees, as hoped for, inflation rising for the 

second consecutive month. 

     The Bank of Canada's core readings of inflation included 1.5% for 

the common measure, one notch above 1.4% in July and the highest since  

September 2016. CPI-median registered at 1.7%, the same as in July. 

CPI-trim was at 1.4%, from 1.3% in July. 

     The 1.4% total CPI annual rate was the highest since 1.6% set in 

April this year. The CPI index had begun this year at 2.1% in January 

and at the desired 2.0% in February before dropping through June. 

     Seasonally adjusted, month-over-month, the CPI increased 0.2% in 

August, matching the gain in July. Five of the eight major components 

were up, led by transportation (+0.8%), while recreation, education and 

reading (-0.2%) posted the largest decline. 

     For the overall 12-month unadjusted index, key August features were 

that six of the eight major components rose, led by the transportation 

(+2.8%) and shelter (+1.3%) indexes. The two year-over-year declines 

were in clothing and footwear (-0.4%) and  household operations, 

furnishings and equipment (-0.2%). 

     More specifically, gasoline led the upward contributors to the CPI 

index, with an 8.6% 12-month rise. Homeowners' replacement costs were up 

4.2%, traveller accommodation up 6.3%, air transportation up 6.2%, and 

food purchased at restaurants higher by 2.6%. 

     The main downward contributors to the 12-month CPI were electricity 

(-8.9%), and women's clothing (-1.9%) and other items such as furniture, 

digital computing equipment and devices, and household appliances. 

     For the unadjusted monthly changes in the CPI, the main upward 

contributor was, again, gasoline. Others included homeowners' 

replacement costs, internet access services, jewellery and passenger 

vehicles insurance premiums. Main downward contributors were telephone 

services (-2.8%), fresh fruit and vegetables (-4.3% and -5.0%) along 

with purchases of passenger vehicles (-0.4%) and purchase of 

recreational vehicles and outboard motors (-1.6%). 

     The NSA index for all items excluding energy rose by 1.3% 

year-over-year (with a decline of -0.1% M/M). Energy rose 2.3% 

year-over-year and all items excluding food and energy rose 1.5%. 

     Overall, goods-producing industries CPI was up 0.4% year-over-year 

and services up 2.2%. 

     Consumer price gains accelerated year-over-year in nine of the 10 

provinces while Manitoba registered the same increase as in July. 

     --MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

     [TOPICS: MACDS$,M$C$$$]