Consumer Price Index, August 2022

In August, the Consumer Price Index (CPI) rose 7.0% on a year-over-year basis, down from a 7.6% gain in July. This was the second consecutive slowdown in the year-over-year price growth and was largely driven by lower gasoline prices in August compared with July.

Excluding gasoline, prices rose 6.3% year over year in August, following a 6.6% increase in July. This is the first month since June 2021 that the year-over-year CPI, excluding gasoline, has slowed.

On a monthly basis, the CPI fell 0.3% in August, the largest monthly decline since the early months of the COVID-19 pandemic. On a seasonally adjusted monthly basis, the CPI was up 0.1%, the smallest gain since December 2020.

Transportation (+10.3%) and shelter (+6.6%) prices drove the deceleration in consumer prices in August. Moderating the slowing in prices were sustained higher prices for groceries, as prices for food purchased from stores (+10.8%) rose at the fastest pace since August 1981 (+11.9%).

Price growth for goods and services both slowed on a year-over-year basis in August. As non-durable goods (+10.8%) decelerated due to lower prices at the pump, services associated with travel and shelter services contributed the most to the slow down in service prices (+5.5%). Prices for durable goods (+6.0%), such as passenger vehicles and appliances, also grew at a slower rate in August.

In August, the average hourly wages rose 5.4% on a year-over-year basis, meaning that, on average, prices rose faster than wages. Although Canadians experienced a decline in purchasing power, the gap was smaller than in July.