Canadian inflation holds at 3% in August as household costs move unevenly

Canada’s consumer price index rose 3% year over year in August, matching July, according to Statistics Canada data reported Monday by The Canadian Press. The unchanged national rate masks different trends across household purchases. [1]

Diverging household costs

Grocery prices are 2.8% higher than a year earlier. Rent inflation accelerated to 2.8% from 2.5% in July. Excluding gasoline, inflation stands at 2.4%. [1]

Reuters reports a 0.1% monthly decline in the overall index. Gasoline nevertheless remains 22.8% more expensive than a year earlier, compared with 25.7% in July. CPI-median and CPI-trim stand at 2% and 1.9%, respectively. These core measures help illuminate the trend beyond the sharpest price movements. [2]

How to read the figures

The Bank of Canada targets 2% inflation, the midpoint of a 1% to 3% range. Its documentation explains that the index combines spending as varied as housing, transportation and food. It therefore does not reproduce any particular family’s shopping basket exactly. [3]

Readers should keep two comparisons separate: the movement from one month to the next and the change over twelve months. Slower annual growth does not mean a return to earlier prices. Income changes and spending patterns will determine the effect felt in each household budget. [3]