"On a year-over-year basis, prices for some of the components included in the core index, such as telephone services and the purchase of passenger vehicles, increased more in August than in July."
- Statistics Canada
Annual core consumer price index in Canada increased from July's 1.7% to 2.1% in August, reaching the highest number in more than two years, as prices of new automobiles and telephone services jumped considerably. The core indicator, however, excludes eight most volatile items. Month-on-month, core inflation added 0.5%, also topping economists' predictions of a 0.2% rise and reversing the negative trend of the previous month. Telephone service became 7.6% more expensive, while cars gained 2.9% in their prices. At the same time, a 5.8% fall in video equipment sub-sector capped the overall increase of the CPI Index. A few days ago, the Bank of Canada's Governor Stephen Poloz underlined that inflation will return to around 2% mark on advancing business investment and exports. Alongside, the BoC expects the inflation to reach its peak of 2.2% between October and December.
Opposite to rising inflation, wholesale sales in Canada dropped 0.3% to $52.9 billion in July after rising 0.8% a month before. Moreover, excluding the motor vehicles' sub-sector, which accounts for 19% of the whole indicator, sales were down 1% month-on-month. The steepest decline was provided by agricultural sector, where sales lost 8.1% on colder and wetter spring in the country. Motor vehicles and parts, in turn, registered a 4.4% gain to $9.4 billion.
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