Canadian CPI down 0.2% in August. Canadian dollar sold hard

The Consumer Price Index (CPI) rose 1.1% on a year-over-year basis in August, following a 1.3% gain in July.

Excluding gasoline, the CPI was up 1.7% year over year in August, after posting a 1.9% increase in July.

Prices were up in seven of the eight major components in the 12 months to August, with the shelter index contributing the most to the year-over-year rise in the CPI. Smaller year-over-year gains in the food index and the recreation, education and reading index contributed the most to the deceleration in the year-over-year increase in consumer prices.

Consumer prices increase in seven of the eight major components

Food prices were up 1.1% year over year in August, after rising 1.6% in July. Prices for food purchased from stores recorded their smallest year-over-year gain since June 2010, up 0.4% in August. On a year-over-year basis, the meat index decreased in August, after increasing in July, and the fresh fruit index posted its first decline since December 2013. Prices for food purchased from restaurants rose 2.5% year over year in August, following a 2.7% gain in July.

The recreation, education and reading index was up 1.1% on a year-over-year basis in August, after posting a 1.9% gain in July. This deceleration was partly attributable to the travel tours index, which declined 5.6% in the 12 months to August, following a 0.4% rise in July. The traveller accommodation index was unchanged on a year-over-year basis in August, following a 0.7% increase in July.