BUSINESS

Canada's Inflation Rate At 2.1% On Higher Housing, Telecom Costs

09/19/2014 08:40 EDT | Updated 06/16/2017 01:00 EDT
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OTTAWA — The rise in the cost of living held steady in August with the annual inflation rate coming in at 2.1 per cent, Statistics Canada said Friday.

That was unchanged from July, when the federal agency's consumer price index also rose by 2.1 per cent over a 12-month period.

Statistics Canada says prices were higher in all 12 categories it looks at, with shelter costs leading the way, up 2.8 per cent in August, down slightly from the 3.0 increase seen in July.

"The household operations, furnishings and equipment index rose 3.0% on a year-over-year basis in August, led by a 7.6% increase in the cost of telephone services. In addition, the cost of Internet access services rose in the 12 months to August," StatsCan said.

"Natural gas prices increased 17.9% on a year-over-year basis in August, after rising 20.4% the previous month. Consumers also paid more for homeowners' home and mortgage insurance."

Food prices were up 2.2 per cent. Fresh fruit and vegetables recorded smaller increases in August than they did in July, but meat cost 9.3 per cent more than it did a year ago.

As well, prices were up in every province, with Saskatchewan seeing the highest gain and Prince Edward Island the smallest.

Core inflation, the number the Bank of Canada closely monitors and which excludes some items from the volatile energy and food categories, rose by 2.1 per cent, after an increase of 1.7 per cent in July.

Economists had expected a gain of 1.8 per cent, according to Thomson Reuters.

On a seasonally adjusted basis, inflation was up 0.1 per cent in August compared with the previous month, when it fell by 0.1 per cent.

The latest read on inflation came as Statistics Canada also reported that wholesale sales fell 0.3 per cent to $52.9 billion in July.

Economists had expected a gain of 0.6 per cent, according to Thomson Reuters.

The drop came as five subsectors, which together represented 81 per cent of wholesale sales, slipped lower, more than offsetting an increase in the motor vehicle and parts subsector.

Wholesale sales declined 1.0 per cent when the motor vehicle and parts subsector was excluded.

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