Steve Flynn  RE/MAX Crest Realty- Burnaby 

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Canadian Inflation (August 2023)

Canadian Inflation (August 2023)

Canadian prices, as measured by the Consumer Price Index (CPI), rose 4 per cent on a year-over-year basis in August, up from 3.3 per cent in July. Excluding gasoline, CPI rose 4.1 per cent year-over-year in August, the same rate as July. Shelter costs were up 6 per cent year over year, up from 5.1 per cent in July, driven by mortgage interest costs (up 30.9 per cent from last year) along with rents (up 6.5 per cent). Grocery prices were up 6.9 per cent year over year in August, down from 8.5 per cent in July. Month over month, seasonally adjusted CPI rose 0.6 per cent. In BC, consumer prices rose 3.8 per cent year-over-year.

The annual change in CPI continued rising in August as gasoline base year effects ended (the year-over-year change in gasoline prices was positive for the first time since January). Although food price inflation continued to gradually ease, shelter and rent inflation rates rose from July. Moreover, the Bank of Canada's measures of core inflation, which strip out volatile components, remained stubbornly high; all three measures were flat or rose in August. With softening labour markets and a flat preliminary July GDP estimate following a small contraction in June, the Bank of Canada opted not to raise rates again in September. However, bond yields jumped following the unexpectedly hot August CPI release, suggesting markets think the Bank could change course again. Guiding inflation back down to 2 per cent was sure to be a bumpy ride and the possibility of another rate hike at the next meeting on October 25th or before the end of the year appears to be still on the table.

Copyright British Columbia Real Estate Association. Reprinted with permission.


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