Canada's August CPI Expected to Edge Higher, But Bank of Canada Core Rates Stable

Canada's August Consumer Price Index (CPI) is due on September 14, and Continuum Economics expects it to edge higher to 3.1% year-over-year from 3.0%. This would mark an extension of the gain from June's 2.8%, but remain below May's 3.2%. The firm also anticipates a firmer ex-food and energy pace at 2.1% from 1.9%

Before seasonal adjustment, both overall and ex-food and energy CPI are expected to be unchanged from July. However, with gasoline prices likely to see a small rise after seasonal adjustment, the seasonally adjusted ex-food and energy rate may slow down in August

The Canadian economy has regained momentum, leading to three straight 0.3% gains in the seasonally adjusted ex-food and energy rate. Despite this trend, Continuum Economics does not believe the economy is strong enough to sustain a 0.3% monthly trend, and some slowing is likely.