MNI 5 THINGS: Canada August CPI +2.8%, But Core Measures Rise>

By Courtney Tower 

     OTTAWA (MNI) - The following are the key points from the August 

data on Canadian inflation published Friday by Statistics Canada: 

     - Headline inflation declined 0.2 percentage points in August to 

2.8% from 3.0% in July year-over-year, and the monthly measure of 

inflation declined 0.1% after rising 0.5% in July. However, all three of 

the Bank of Canada's preferred measures of core inflation rose 0.1 

percentage point in August, year-over-year: CPI-common to 2.0%, 

CPI-median to 2.1%, and CPI-trim to 2.2%. The common and trim measures 

are at their highest since February of 2012. 

     - Analysts surveyed by MNI had expected the +2.8% year-over-year 

but had expected a flat result for the monthly figure. With two months 

gone of the third quarter, registering annual CPI inflation at 3.0% and 

2.8%, the Bank of Canada's expectation of 2.5% inflation for the third 

quarter may be exceeded. 

     - Prices rose year-over-year in all eight major components of the 

CPI basket of goods and services, but many of them at a slower pace than 

in July. Prices rose less year-over-year in August than in July in eight 

of the 10 provinces. Transportation was the largest contributor to the 

national year-over-year increase but at a slower pace (7.2% in August, 

8.1% in July). 

     - Year-over-year prices for non-durable goods (+3.8%) rose more 

slowly in August than in July (+4.4%). Gasoline prices rose 19.9% 

year-over-year in August, still very high, but less than the 25.4% 

increase in July. Prices for durable goods, on the other hand, rose 

faster than in the previous month: +1.1% year-over-year in August after 

+0.8% in July. With more 2019 cars available, the purchase of passenger 

vehicles index was +2.3% in August, up from +2.0% in July. 

     - Prices of services rose a tick more slowly in August than in 

July, year-over-year. They registered +3.1% in August versus +3.2% in 

July. There were lower seasonal costs for travel tours and air 

transportation. The seasonally adjusted monthly CPI rose 0.1% in August 

from July's 0.5% increase, on increases for seven of the eight major 

components. 

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

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