August inflation rate climbs to 3.1 per cent

Gasoline and groceries taking more of consumers’ budgets
By Gordon Sova
||Last Updated: 09/21/2011

The annual rate of inflation in August was 3.1 per cent, up from 2.7 per cent in July but the same as June’s rate, Statistics Canada reported today. Energy, the usual suspect, increased by 13.4 per cent from August 2010 and gasoline alone increased 22.8 per cent over the same period.

The cost of food was another factor. It grew at 4.4 per cent annually in August after climbing by 4.3 per cent in July. Food purchased from stores increased in price more sharply than food from restaurants.

On a month-over-month basis, prices increased by 0.3 per cent seasonally adjusted, fueled by higher costs for automobiles, electricity, home insurance and telephone services.

The annual increase in the CPI grew from west to east. Inflation in all the Atlantic provinces was above the national average. In Ontario, it was the same. In the Prairies and B.C., it was lower.

The Bank of Canada’s core inflation rate, which excludes volatile items such as energy, stands at 1.9 per cent, up from 1.6 per cent in July.

South of the border, inflation in August stood at 3.8 per cent after three months unchanged at 3.6 per cent. The “core” rate (minus energy and food) is 2.0 per cent, the highest rate since November 2008. Again, energy pricesare the prime driver of cost increases.

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