The Consumer Price Index (CPI) edged up 0.1% on a year-over-year basis in August, reported Statistics Canada. This marks an identical increase as the previous month. Excluding the price of gasoline, the CPI increased by 0.6%. In August, the CPI increased 0.1% on a seasonally adjusted monthly basis.
In general, in August prices increased in five of the eight major component indexes.
Gasoline Index
In August, the price of gasoline dropped 11.1% over the last 12-month period, compared to the 14.9% plunge seen in July. “The more moderate year-over-year price decline in August stemmed from weaker gas prices in August 2019, when gas prices declined as a result of higher production and softer international demand,” stated Statistics Canada.
Air Transportation Index
Over the 12-month period, air transportation prices plummeted 16% in August, marking the second consecutive monthly decline of this index – prices dropped 8.6% in July. Demand for air travel has fallen during the pandemic and airlines continue to offer travel discounts to encourage a return to travel,” explained Stats Can.
Food Index
Within the food index, the beef price growth slowed for the second consecutive month. “Year-over-year price growth for fresh or frozen beef (+4.8%) slowed as prices continued to fall from a 21.6% year-over-year increase in June 2020, when reduced production impacted supply and contributed to higher beef prices. By August, beef prices had returned to levels near those at the onset of the COVID-19 pandemic in March,” stated Statistics Canada in their report.
Statistics Canada released a statement regarding the COVID-19 pandemic and its effects on the CPI.
“Statistics Canada continues to monitor the impacts of the novel coronavirus (also known as COVID-19) on Canada’s Consumer Price Index (CPI). In August, measures remained in place across much of the country to restrict gatherings and the movement of people. In-person field collection continued to be conducted via telephone or Internet for health and safety reasons, supplementing prices collected via web scraping, transaction data and administrative data. Due to the impact of COVID-19 on product availability in the month of August 2020, select sub-components of the CPI received temporary special imputations. Goods and services in the CPI which were not available to consumers in August due to COVID-19 restrictions received special treatments, effectively removing their impact on the monthly CPI. The following sub-indexes were imputed from the monthly change in the All-items index: travel tours, components of spectator entertainment, and recreational services. Consistent with previous months affected by the COVID-19 pandemic, prices for suspended flights are excluded from the August CPI calculation because passengers were ultimately unable to consume them. As a result, select sub-components of the air transportation index were imputed from the parent index. Where prices were missing due to high levels of out-of-stock products or the temporary closure of businesses, they were imputed with the average price movement of available prices for those items. A document entitled Technical Supplement for the August 2020 Consumer Price Inde is available in the Prices Analytical Series (62F0014M) publication, with further details on the imputations used to compile the August 2020 CPI.”
Source cited: https://www150.statcan.gc.ca/n1/daily-quotidien/200916/dq200916a-eng.htm
Sarah has been writing on the topics of politics, history and finance for over a decade. She is currently an editor at CPI Inflation Calculator, covering the topics of CPI, inflation, US economy and economic commentary.
