08/22/2014 08:51 EDT | Updated 10/22/2014 05:59 EDT

Inflation rate in Canada cools to 2.1% in July

Canada's inflation rate slowed to 2.1 per cent in July, slightly below the 2.4 per cent in the previous month.

Statistics Canada reported Friday that shelter and food were the biggest contributors to the annual increase in the consumer price index, although all 12 components the agency tracks were higher.

The transportation sector was a weak point, however. After increasing by 5.4 per cent in June, the increase in pump prices slowed last month, to 2.1 per cent. But gasoline prices were offset by a jump in natural gas, which was 20 per cent more expensive this July than it was a year ago.

The costs of home and mortgage insurance also rose, along with property taxes. And the price of cigarettes increased by more than 10 per cent after a series of new taxes were implemented.

June's overall rate was the highest level in more than two years, but even after the pullback in July, Canada's inflation rate is still above the midpoint of the range policymakers like to see — between one and three per cent.

"This report is consistent with the view that inflation pressures observed earlier this year have started to moderate as some of the temporary upward influences reverse course," TD economist Randall Bartlett said of the data, in a note to clients Friday morning.

Regionally, consumer prices rose in every province. Ontario,Saskatchewan and Alberta posted the largest increases, while British Columbia recorded the smallest.

Saskatchewan and Alberta were the only provinces where prices rose at faster rates in July compared to June.