Gas prices locally on Monday morning were among the lowest in the province according to GasBuddy.com. Most stations in the city were at $1.13.9 for regular self serve while the Super Save station on Green Mountain Road was at $1.12.9. (Mark Brett - Western News)

Canadian inflation decelerates to 1.9% as gas prices weaken

August was the sixth straight month that price growth was 1.9 per cent or higher

Canada’s annual inflation rate slowed slightly to 1.9 per cent in August under the weight of declining gasoline prices.

Inflation was firm enough to stick close to the Bank of Canada’s ideal two per cent target — and August was the sixth straight month that price growth was 1.9 per cent or higher.

The price picture, on its own, did not put pressure on the inflation-targeting Bank of Canada to adjust interest rates.

Excluding pump prices, the consumer price index was up 2.4 per cent from a year ago, Statistics Canada said Wednesday in a new report. Gas prices fell 10.2 per cent last month, which followed a decrease of 6.9 per cent in July.

Price growth was also held back last month, compared with a year earlier, by lower costs for traveller accommodation, internet access services and furniture.

On a month-to-month basis, the price of pork declined 2.7 per cent at a time when Canadian pork products are facing tougher restrictions in the key Chinese market. Consumers also paid 6.5 per cent less for fresh vegetables — the largest decline in five years — as temporary price increases due to poor weather in growing regions eased off.

READ MORE: Inflation hits Bank of Canada 2% target for second straight month

The upward pressure on consumer prices, year-over-year, was led by higher costs for airline tickets, mortgage interest and auto insurance.

The cost of air travel climbed 10.3 per cent in August. The increase was largely related to the impact of the grounding of Boeing 737 Max jets during the busy summer travel season, the report said.

Natural gas prices rose to 5.8 per cent last month, up from a 3.2 per cent increase in July.

The average of Canada’s three gauges for core inflation, which are considered better measures of underlying price pressures by excluding volatile items like gas, hit the central bank’s target at two per cent. The reading was 2.03 per cent in July.

Canada’s domestic economy has been resilient even as trade wars inject significant uncertainty into the slowing global economy.

Many forecasters have been expecting the Bank of Canada to cut its overnight lending rate before the end of the year and perhaps as early as its Oct. 30 policy announcement.

Economists on average had expected an inflation reading of 2.0 per cent for August, according to financial markets data firm Refinitiv.

This report by The Canadian Press was first published Sept. 18, 2019.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

87-year-old Lacombe resident ‘Grandpa Bill’ goes viral on TikTok

Bill Clark’s video has had nearly 300,000 views on the platform

Town of Castor to open tenders to replace garbage truck

Council decided to purchase a used rear load garbage truck to replace the existing the one

Every Albertan eligible for COVID-19 testing

22 new cases confirmed on Friday

Fast-food restaurants serving up free non-medical masks

Free protection will come in packages of four

Alberta confirms 29 new COVID-19 cases

Of the total 6,955 confirmed cases, 652 are active

VIDEO: Procession to honour Snowbirds Capt. Jennifer Casey comes to Halifax

Snowbirds service member died in a crash in Kamloops one week ago

Laurentian Bank Financial Group reports Q2 profit down, cuts quarterly dividend

Laurentian Bank Financial Group reports Q2 profit down, cuts quarterly dividend

COVID cancelled their wedding plans, so they married on a BC mountaintop

Ceremony was live streamed to friends and family around the world

Crude has best month on record in May as prices surge 88 per cent

Crude has best month on record in May as prices surge 88 per cent

‘It is dire:’ Study finds B.C. logging continues on critical caribou habitat

‘It is dire:’ Study finds B.C. logging continues on critical caribou habitat

Hitching a ride: How risky is carpooling during COVID-19 pandemic?

Hitching a ride: How risky is carpooling during COVID-19 pandemic?

Condition in kids with possible COVID-19 link being studied in Canada

Condition in kids with possible COVID-19 link being studied in Canada

PODCAST: The Expert tackles the return of sports

Cam Moon, Joe Whitbread, Byron Hackett and Todd Vaughan discuss how sports can come back

Most Read