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A Slower Pace? Canada’s Inflation Rate Slowed to 7% in August

A young woman holds a credit card

In 2022, it’s hard not to worry about our wallets, but today’s Statistics Canada Consumer Price Index report for August 2022 offers a bit of optimistic news for Canadians — the annual rate of inflation slowed a touch to 7 per cent in August, amid falling gas prices.

This 7 per cent rate indicates a continued downward trend, as the year-over-year inflation rate slowed in July to 7.6 per cent.

Related: ‘Tip-flation’ is real in Ontario — this is how much the average tip is right now.

Gas prices plummeted in August

Though gas prices are definitely still high (they were up 22 per cent year-over-year in August), they were down 9.6 per cent on a monthly basis — which is the biggest monthly drop since April 2020.

See also: We’re charging less on our credit cards — but spending more in other ways: study.

Grocery prices went up in August

The August report, however, also showed some continuing struggles for Canadians’ wallets — specifically, grocery prices were up 10.8 per cent year-over-year from August 2021, which was the fastest increase since 1981.

Some of the biggest jumps in food prices? As Global News reports, baked goods were up more than 15 per cent, non-alcoholic beverages were up 14.1 per cent and fresh fruit was up 13.2 per cent. These higher costs could be due to issues like “extreme weather, higher input costs, disrupted global supply chains and Russia’s war in Ukraine.”

You may also like: Is Canada in a recession? 3 telltale signs to watch out for.

While the slowing in inflation feels like positive news, economists warn that the economy is still in a precarious situation.

“Even after today’s deceleration, the annual rate of inflation remains well above the Bank of Canada’s target and as such further interest rate hikes are still in the cards,” CIBC senior economist Andrew Grantham said in a note to Global News.


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