Boeing grounding pushes up Canadian airfares
Inflation in Canada decelerated in August after consumers paid less for gasoline and vegetable prices dropped.
Annual consumer price inflation slowed to 1.9 per cent last month from two per cent in July, Statistics Canada said Wednesday in Ottawa. The number matched analyst expectations.
Canada's CPI has grown at 1.9 per cent or more on an annual basis for six consecutive months. The gains have coincided with robust labor market conditions.
Core inflation -- seen as a better gauge of underlying price pressure -- met the Bank of Canada’s target. The average of the three measures was two per cent. Economists had forecast an average rate of 2.03 per cent, which would have been unchanged from July.
- The slowdown in the annual inflation rate likely isn’t substantial enough to push Bank of Canada policy makers to consider a rate cut, despite the global easing trend of other central banks
- Another argument for the central bank to stick to its current policy stance is that core inflation remained at the two per cent target in August. The common rate was 1.8 per cent, down slightly from 1.9 per cent in July; the median rate was 2.1 per cent and the trim rate was 2.1 per cent, both unchanged from the previous month. The average of three measures was two per cent in August, decelerating slightly from 2.03 per cent in July
- The market has priced in less than a 25 per cent chance the Bank of Canada will cut rates by the end of the year. That contrasts with the U.S., where a rate cut by the Fed at its meeting Wednesday is fully priced in
- A strong run of recent economic data has supported the central bank’s reasoning for keeping rates steady. There are some signs of weakness, however, particularly in the manufacturing sector, which could weigh on output
- Excluding gasoline, consumer prices accelerated 2.4 per cent, matching July's pace
- Statistics Canada said gasoline prices fell 10.2 per cent in August due to higher global production and soft international demand
- Natural gas prices rose 5.8 per cent in August on an annual basis, recovering from earlier this summer, when gas pipeline maintenance was ongoing and inventories were higher
- Fresh vegetable prices fell 6.5 per cent, posting the largest monthly decline in five years; Fresh fruit index dropped one per cent annually